Archived article: Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Following exclusive talks, Netflix announced the purchase of Warner Bros Discovery on 5 December in a stock and cash transaction valued at $27.75 per share for a total value including debts of $82.7 billion.
The agreement was unanimously approved by the boards of directors of both companies.
The initial market reaction saw Netflix shares falling 3% in premarket trading while Warner Bros Discovery shares moved around 3% higher.
The transaction is expected to close in the third quarter of 2026 after the previously announced separation of Warner Bros’ global networks division, Discovery Global, into a new publicly traded company.
Why are Netflix shares down?
The transaction is likely to raise competition concerns for US regulators given it brings together two of the world’s largest streaming companies under the same ownership.
Netflix has reportedly offered Warner Bos Discovery a $5.8 billion break-up fee should the transaction fall foul of the regulators.
Prior front runner to acquire Warner Bros, Paramount Skydance, has argued Netflix would face pushback from competition regulators given its dominant position in streaming services.
Analysts at Wedbush said they believe the regulatory process would be lengthy and may ultimately block the sale without clear assurances from the studios.
Tom Harrington, head of television at Enders Analysis expressed similar concerns, saying there would likely be resistance from parts of Hollywood and unions.
Ted Sarandos, co-CEO of Netflix said: “By combining Warner Bros’ incredible library of shows and movies—from timeless classics like Casablanca and Citizen Kane to modern favourites like Harry Potter and Friends—with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we'll be able to do that even better.”
David Zaslav, president and CEO of Warner Bros Discovery commented: “Today’s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most.”
Martin Gamble: Shares and Markets Writer
Martin Gamble is Shares and Markets writer at AJ Bell. He was previously the Education Editor of Shares Magazine. He has been with the business since 2019.
Martin graduated from the University of Kent in...
