One of the world’s most popular streaming businesses, Netflix, will own one of the most iconic film studios: Warner Bros.
Netflix announced Friday morning that it will buy Warner Bros. Discovery, Inc. at a price of $27.75 per share, or around $82.7 billion.
The deal merges Netflix with another popular streamer, HBO Max. Netflix’s acquisition narrows the competition field and bolsters the company against Disney’s streaming portfolio.
Netflix competed with Paramount Inc. and Comcast to buy Warner Bros. Discovery. Paramount expressed concerns that the bidding process wasn’t fair and that Warner Bros. Discovery favored Netflix to be its new owner.
Netflix denied the allegation, saying it “robustly” complied with its fiduciary obligations.
“Please be assured that the WBD Board attends to its fiduciary obligations with the utmost care, and that they have fully and robustly complied with them and will continue to do so,” the company wrote.
Paramount warned early this month that Netflix will never receive regulatory approval.
“The simple truth is that a deal with Netflix as the buyer likely will never close…Netflix is the only remaining Big Tech company that has not faced serious global antitrust enforcement, but attempting to acquire the WBD assets will change that,” the company’s attorneys wrote in a letter.
Federal Communications Commission chairman Brendan Carr previously told The Guardian that he doubted the commission would be involved had Paramount acquired Warner Bros.
“I’d be very surprised if there was an FCC role at all in that type of transaction,” Carr said, adding that he was “not focused on the rumor mills around those transactions.”
White House officials have reportedly discussed antitrust concerns with the deal. There’s questions whether it would give Netflix too much power over the movie industry.
“Basically everyone agreed that Netflix presents unique antitrust concerns and if it won the bidding war it would be one long slog and touch off an investigation along the lines of those of Google and Amazon,” a government official told the New York Post.
Paramount owner and President Donald Trump ally David Ellison met with White House officials on Wednesday in an effort to turn the government against Netflix’s then-potential acquisition of Warner Bros. Ellison’s father, Larry, is the second richest person in the world and a Trump ally.
With the acquisition by Netflix, HBO franchises such as The Big Bang Theory, The Sopranos, Game of Thrones, The Wizard of Oz, and the DC Universe will be added to Netflix.
“Our mission has always been to entertain the world,” Ted Sarandos, co-CEO of Netflix, said in a press release.
“By combining Warner Bros.’ incredible library of shows and movies—from timeless classics like Casablanca and Citizen Kane to modern favorites 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. Together, we can give audiences more of what they love and help define the next century of storytelling,” he added.
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It’s unclear if HBO Max will be merged with Netflix’s streaming service or if the streaming services will remain separate.
The deal is pending regulatory approval and is expected to be completed in the third quarter of next year. If approval fails, Netflix has offered WBD a $5 billion break-up fee to compensate WBD.
Investors favored Warner Bros. and booed Netflix in Friday morning trading. Netflix’s share price fell around 4% in pre-market trading while Warner Bros. Inc surged around 3.8%.
