The deal gives Netflix access to television hits such as "The White Lotus" and "The Sopranos" as well as the Harry Potter films and the television series "Friends" which are part of Warner Bros.' film and television operations.
Now you are merging two companies that actually do the same thing, speak the same language and have easier synergies and the positive effects of a merger because they are active in the same area, says Fredrik Liljeqvist, chief analyst at the analysis company Mediavision.
Netflix is buying media conglomerate Warner Bros. Discovery for $27.75 per share in a deal that values the company at $82.7 billion, significantly higher than Paramount's previous bid for the company. The deal includes Warner Bros.' film business, HBO Max and HBO.
The transaction will take place after the spin-off of the cable channel Discovery Global, and is expected to be completed in the third quarter of 2026.
Netflix will take out a $59 billion bridge loan from several major US banks. The deal will also be paid for partly in Netflix shares.
Netflix is buying the production part of the streaming business, but they are spinning off the cable companies. That may be a sufficient measure to prevent Netflix from being seen as getting too big either, says Fredrik Liljeqvist.
Warner Bros is one of Hollywood's most classic film companies, founded in the 1920s. Netflix started three decades ago as a company that rented DVD movies, and has now grown into a giant in the streaming market with revenues last year of over $39 billion.
Following the announcement, Netflix shares fell 4 percent in pre-market trading. Warner Bros. Discovery shares rose 5 percent in pre-market trading.
