New York: Netflix has struck a deal to acquire Warner Bros. Discovery’s studio and streaming operations for $72 billion, bringing two of Hollywood’s biggest players in film and television under one roof.

The acquisition, announced on Friday, includes Warner’s namesake television and motion picture division, HBO Max, and DC Studios. Netflix, which has become a household name in on-demand content and has built its own production arm with hits such as Stranger Things and Squid Game, will expand its footprint in legacy Hollywood studios under the deal.

The cash and stock transaction is valued at $27.75 per Warner share, giving it a total enterprise value of around $82.7 billion. The acquisition is expected to close after Warner separates its Discovery Global cable operations into a new publicly traded company in the third quarter of 2026.

Shares of Warner Bros. rose nearly 3% in premarket trading, while shares of Netflix and Paramount fell by more than 2%.

Gaining Warner’s legacy studios represents a major shift for Netflix’s approach to theatrical releases. Under the proposed deal, Netflix has pledged to continue theatrical screenings for Warner’s films, honouring existing contractual agreements. Until now, Netflix has largely confined its original content to its online platform, with only limited exceptions such as the KPop Demon Hunters sing-along and the upcoming Stranger Things series finale.

As recently as October, when Warner signalled it was open to a potential sale, Netflix co-CEO Ted Sarandos emphasised on an earnings call that the company had been “very clear in the past that we have no interest in owning legacy media networks” and that “there was no change there.” He added: “We believe that we can be and we will be choosy,” without fully ruling out a potential bid for Warner.

Friday’s announcement follows a months-long bidding contest for Warner Bros. Discovery, with interest reportedly from Netflix, NBC owner Comcast, and Paramount, which completed its own $8 billion merger in August. Paramount, backed heavily by CEO David Ellison’s family, had appeared to be the frontrunner for a time and was reportedly vying to purchase Warner’s entire company, including its cable networks such as CNN and Discovery.

(AP)