Netflix opens new tab on Friday agreed to buy Warner Bros Discovery's, opens new tab TV, film studios and streaming division for US$72 billion, a deal that would hand control of one of Hollywood's most prized and oldest assets to the streaming pioneer.
The deal represents a dramatic plot twist for Netflix, which rewrote the Hollywood script, upending how and when consumers watch movies and television shows. Suddenly, it has become the thing it disrupted - a mainstream studio.
"I know some of you are surprised that we're making this acquisition - and I certainly understand why," Netflix Co-CEO Ted Sarandos said on a call with investors. "Over the years, we have been known as builders, not buyers ... but this is a rare opportunity that's going to help us achieve our mission to entertain the world, and bring people together through great stories."
The agreement follows a weeks-long bidding war in which Netflix offered nearly $28 per share, eclipsing presumed front-runner Paramount Skydance (PSKY.O), opens new tab, which made a series of unsolicited bids to acquire all of Warner Bros Discovery, including the cable TV assets slated for a spinoff.
Netflix, which has spent a decade developing such original series as "Stranger Things," "Bridgerton" and films like "KPop Demon Hunters," will gain access to Warner Bros' vast trove of content, built over the last century, including marquee franchises such as "Game of Thrones" and "Harry Potter," and DC Comics' roster of superheroes, including Batman and Superman.
The two companies together will "help define the next century of storytelling," said Sarandos, who had once said "the goal is to become HBO faster than HBO can become us."
Warner Bros Discovery shares rose 3.2% to $25.33, while Netflix fell about 0.2% and Paramount 6.1%.
Paramount and Comcast, the third suitor, did not immediately respond to requests for comment.
Paramount offered $30 a share for Warner Bros Discovery and is considering making a takeover offer directly to WBD's shareholders, CNBC reported. Reuters could not verify the report and it was not immediately clear when the offer was made.
