Netflix agreed to buy Warner Bros. Discovery, marking a seismic shift in the entertainment business as a Silicon Valley-bred streaming giant tries to swallow one of Hollywood¡¯s oldest and most revered studios.
Under terms of the deal announced Friday, Warner Bros. shareholders will receive $27.75 a share in cash and stock in Netflix, valuing the business at $82.7 billion including debt. The total equity value of the deal is $72 billion. Warner Bros. will spin off cable networks such as CNN and TNT into a separate company before concluding the sale of its studio and HBO to Netflix.
Media mergers of this scale have a rocky history and this one is expected to bring intense regulatory scrutiny in the U.S. and Europe. Paramount Skydance, which accused Warner Bros. of running an unfair sales process, could also take steps to disrupt the transaction, such as by taking an offer directly to shareholders. The company declined to comment.
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