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Netflix Enters Agreement to Acquire Warner Bros., HBO, HBO Max
posted on by Adriana Hazra & Alex Mateo
Netflix offered US$27.75 per Warner Bros. Discovery share with a total equity value (for shareholders) of approximately US$72.0 billion and a total enterprise value of approximately US$82.7 billion. Warner Bros. Discovery shareholders will receive US$23.25 in cash and US$4.50 in shares of Netflix common stock for each share of Warner Bros. Discovery stock.
The Boards of Directors of both Netflix and Warner Bros. Discovery unanimously approved the transaction.
Reuters had reported on Friday that Netflix entered into exclusive talks with entertainment conglomerate Warner Bros. Discovery regarding the possibility of acquiring its studio and streaming service. Reuters had reported on Thursday that Netflix offered around US$28 a share for the company. Netflix, Paramount Skydance, and Comcast made preliminary buyout proposals, and then Warner Bros. Discovery received a second round of bids this week.
Bloomberg additionally reported on Friday that Netflix also offered a US$5 billion breakup fee if regulators do not approve of the deal.
Deadline also reported on Thursday that the Directors Guild of America plans to meet with Netflix to discuss its "concerns" regarding the potential acquisition.
Warner Bros. Discovery Announced Plans for Possible Sale in October
Warner Bros. Discovery had revealed on October 21 that it was evaluating the possible acquisition of the whole company, or separate acquisitions for its Warner Bros. and Discovery Global businesses, as part of "a review of strategic alternatives to maximize shareholder value" initiated by the company's Board of Directors. The announcement noted that Warner Bros. Discovery had received "unsolicited interest" from multiple parties regarding a possible acquisition of the entire company or the Warner Bros. business. Warner Bros. Discovery had also left open the possibility of "an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to our shareholders." The company had stated that it does not assure that the review would result in a final sale of the company.
The Wall Street Journal reported on September 12 that the newly formed entertainment conglomerate Paramount Skydance was evaluating the possibility of acquiring Warner Bros. Discovery. Bloomberg reported on October 11 that Warner Bros. Discovery had rejected an offer from Paramount Skydance for US$20 per share, with a report from the New York Post on October 15 claiming that Warner Bros. Discovery president and CEO David Zaslav wanting a sale price of US$30 per share. Deadline reported Paramount had insisted in a letter to Warner Bros. Discovery that the rival offers from Netflix and Comcast both “present serious issues that no regulator will be able to ignore” and that Netflix would face major antitrust hurdles adding HBO Max to the company.
Warner Bros. Discovery announced its intent to split its company into two separate publicly traded companies on June 9, later naming these companies as Warner Bros. and Discovery Global. Warner Bros. will own Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, HBO Max, and Warner Bros. Gaming Studios. Discovery Global will own CNN, TNT Sports in the U.S., and Discovery. The split is planned to occur in mid-2026.
How Warner Bros. Discovery Was Formed
Warner Bros. Discovery was formed after AT&T spun off its WarnerMedia business and it merged with Discovery, a process that began in 2021 and completed the following year. Some of the anime industry-related assets involved in the company's formation included Cartoon Network (with the Toonami and Adult Swim programming blocks), Boomerang, HBO Max, VRV, and other channels and services that have offered anime in their programming. On the Discovery side, the Discovery Family channel (formerly known as The Hub) featured programming with some Japanese roots such as Transformers, Pac-Man, and Deltora Quest.
Warner Bros. Discovery also owns the production company Warner Bros. Japan, which launched in 2011.
Warner Bros. Japan is involved in several anime properties and has produced over 80 anime titles, including Is It Wrong to Try to Pick Up Girls in a Dungeon?, Food Wars! Shokugeki no Soma, JoJo's Bizarre Adventure, Record of Ragnarok, and SPY x FAMILY. Warner Bros. Japan and its parent company also handle overseas and domestic live-action film productions of Japanese properties such as Godzilla, Rurouni Kenshin, Gintama, and Death Note. As of last year, Warner Bros. Japan plans to increase its annual output from five to 10 anime titles to over 10.
The HBO Max streaming service offers GKIDS' "entire Studio Ghibli film library." At launch, Crunchyroll (previously part of WarnerMedia), Cartoon Network, Adult Swim, and Rooster Teeth also offered content through the service. The service announced an increase in the price of its subscription plans on October 21, marking the third price increase since launch. (HBO Max raised its subscription prices in February 2023 and June 2024.)
