Netflix on Friday agreed to buy Warner Bros Discovery's TV, film studios and streaming division for $72 billion, a deal that would hand control of one of Hollywood's most prized and oldest assets to the streaming pioneer.
The agreement follows a weeks-long bidding war in which Netflix offered nearly $28-a-share, eclipsing Paramount Skydance's close to $24 bid for the whole of Warner Bros Discovery, including the cable TV assets slated for a spinoff.
Buying the owner of marquee franchises including 'Game of Thrones', 'DC Comics' and 'Harry Potter' will further tilt the balance of power in Hollywood in favour of Netflix, which has so far built its dominance without major deals or a large content library.
The two companies together will "help define the next century of storytelling", said Netflix co-CEO Ted Sarandos, who had once said "the goal is to become HBO faster than HBO can become us".
Warner Bros Discovery shares rose nearly 4.4 per cent to $25.6 premarket, while Netflix fell about 3 per cent and Paramount 2.2 per cent.
Paramount and Comcast, the third suitor, did not immediately respond to requests for comment.
Paramount offered $30 a share for Warner Brothers Discovery, CNBC reported in a news flash. Reuters could not verify the report and it was not immediately clear when the offer was made.
The Netflix deal, however, is likely to face strong antitrust scrutiny in Europe and the US as it would give the world's biggest streaming service ownership of a rival that is home to HBO Max and boasts nearly 130 million streaming subscribers.
David Ellison-led Paramount, which kicked off the bidding war with a series of unsolicited offers and has close ties with the Trump administration, had questioned the sale process earlier this week and alleged favorable treatment to Netflix.
Even before the bids were in, some members of Congress said a Netflix-Warner Bros Discovery deal could harm consumers and Hollywood.
Cinema United, a global exhibition trade association, has said the deal poses an "unprecedented threat" to movie theatres worldwide, while former WarnerMedia CEO Jason Kilar said he could not think of "a more effective way to reduce competition in Hollywood than selling WBD to Netflix".
Looking to allay some concerns, Netflix said the deal would give subscribers more shows and films, boost its US production and long-term spending on original content and create more jobs and opportunities for creative talent.
The company argued in deal talks that a combination of its streaming service with HBO Max would benefit consumers by lowering the cost of a bundled offering.
The company has told Warner Bros Discovery it would keep releasing the studio's films in cinemas in a bid to ease fears that its deal would eliminate another studio and major source of theatrical films, according to media reports.
"In light of the current regulatory environment this will raise eyebrows and concerns. The combined dominant streaming player will be heavily scrutinised", said PP Foresight analyst Paolo Pescatore. — Reuters
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