Netflix strikes £54bn deal to buy Warner Bros studios
It had battled with Paramount Skydance and Sky owner Comcast to buy the studio business, which also runs HBO.
Netflix has agreed to buy Warner Bros Discovery film and TV studios business in a 72 billion US dollar (£54 billion) deal.
The US streaming giant confirmed the deal on Friday after it had emerged as the front-runner to buy the business, which owns franchises such as Harry Potter and Batman, following an auction process.
It had battled with Paramount Skydance and Sky owner Comcast to buy the studio business, which also runs HBO and fellow streaming service HBO Max.
The deal could dramatically further reshape the established Hollywood film and TV industry, which has already faced significant upheaval amid the rapid growth of streaming.
Bosses at Netflix said they expect to maintain Warner Bros current operations and will continue to release films in cinemas.
Netflix said it will pay 27.75 dollars (£20.79) per share to investors in the Warner Bros Discovery business.
The deal will close after Warner Bros Discovery completes a proposed spin-off of its cable channels, which include CNN, TBS and TNT Sports in the UK.
As a result, the process is not expected to complete until at least the third quarter of next year.
Nevertheless, the deal is likely to garner significant scrutiny from regulators in the US and Europe.
Ted Sarandos, co-chief executive of Netflix, said: “Our mission has always been to entertain the world.
“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.
“Together, we can give audiences more of what they love and help define the next century of storytelling.”
Netflix said the move will provide it with a much deeper library of film and TV content for its subscribers.
It will also enhance its studio capabilities, allowing the company to expand its production capacity and increase investment in original content over the longer term.
David Zaslav, president and chief executive of Warner Bros Discovery, said: “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.”
Netflix shares moved slightly lower after the deal was announced.
Danni Hewson, AJ Bell head of financial analysis, said: “Splashing out so much cash was never going to make the share price jump with delight, but if this deal can clear those significant regulatory hurdles quickly there are likely to be considerable cost savings to be made.
“How much of those savings get passed to streaming platform subscribers or whether Netflix will be seen to have too much pricing power is one of the areas that will face a huge amount of scrutiny in the coming months.”