Streaming "Royal Flush" merge! Netflix (NFLX.US) officially announced the acquisition of Warner Bros. Discovery (WBD. US) for $82.7 billion to establish a "super content" empire.

Netflix (NFLX.US) announced that it will acquire Warner Bros. Discovery Channel (WBD.US) at a price of $27.75 per share (approximately $82.7 billion in total enterprise value), including its film and television production departments, HBO Max, and other businesses. Netflix stated that it will maintain Warner Bros.' existing operating model, with the total equity value of the transaction estimated to be around $72 billion. A previous report indicated Netflix offered the highest bid to acquire Warner Bros. Under the terms of the agreement, each Warner Bros. shareholder will receive $23.25 in cash and 4.501 shares of Netflix common stock per share. The deal is expected to be completed following the announcement of Warner Bros. Global Networks Division separating from Discovery Global and forming a new publicly traded company. The merger is anticipated to be completed in the next quarter of 2026. The transaction is expected to be finalized within 12 to 18 months. This acquisition will solidify Netflix's dominant position in the streaming industry by acquiring Warner Bros.' film studio and HBO Max platform, potentially introducing bundled services to reduce consumer costs. Warner Bros. initiated the sale process in October due to financial pressures. The sale process of Warner Bros. has been controversial, with ParamountSky (PSKY.US) questioning the "fairness and reasonableness" of the process. Warner Bros. appeared to favor Netflix's bid while ignoring several other offers from ParamountSky, which raised concerns about the process. ParamountSky was the first to reach out to Warner Bros. Discovery. ParamountSky had previously offered a buyout of approximately $60 billion, but Warner Bros. Discovery's board rejected it in October, leading to the formal sale process. ParamountSky planned to acquire all of Warner Bros. Discovery's assets, with an initial bid of around $20 per share gradually increasing to $23.5 per share. The latest proposal was $24 per share, with 80% cash and 20% stock, but was rejected by Warner Bros. Discovery citing a "severe undervaluation of the company." Through this deal, Netflix will become the owner of HBO network and its popular series library such as "The Sopranos" and "Big Little Lies". Additionally, Warner Bros. Discovery's assets include its large production studio in California and a vast catalog of films and TV shows including "Harry Potter" and "Friends". The company stated, "Beloved series, programs, and movies such as 'The Big Bang Theory', 'The Sopranos', 'Game of Thrones', 'The Wizard of Oz' and the DC Universe, will now be part of Netflix's extensive catalog, providing unparalleled entertainment experiences for global audiences." The merged entity will become a new Hollywood powerhouse, forming a super company in the streaming market with a massive user base (Netflix's 300+ million users combined with HBO Max users) and a vast array of top-tier IP. This deal will solidify the trend of consolidation in the streaming industry and may prompt other major players (such as Walt Disney Company, Comcast Corporation Class A, etc.) to consider further mergers or strategic alliances to remain competitive.