Netflix Secures Landmark $82.7 Billion Warner Bros. Discovery Acquisition

Netflix US64110L1061

The battle for Hollywood supremacy has reached a decisive conclusion. In a move that reshapes the media landscape, Warner Bros. Discovery's (WBD) board has unanimously rejected a hostile takeover bid from Paramount Skydance, formally aligning itself with streaming giant Netflix. This clears the path for one of the largest mergers in entertainment history, valued at $82.7 billion. For investors, the implications are profound.

Market attention is now fixed on January 20, 2026, when Netflix is scheduled to release its quarterly earnings. The report must demonstrate that its record-breaking viewer metrics are translating into sustainable subscriber growth. This will be a key test of confidence as the merger progresses.

The core of the agreement, signed on December 5, 2025, sees Netflix acquiring Warner Bros. Studios along with the HBO Max and HBO streaming platforms. The transaction values the target assets at approximately $27.75 per WBD share. The payment structure involves a cash component of $23.25 per share, with the remainder settled in Netflix stock.

A critical factor in WBD's decision was financial stability. The competing offer from Paramount Skydance relied on risky, highly leveraged financing. In contrast, Netflix brings an 'Investment Grade' credit rating and a market capitalization exceeding $400 billion to the table, offering a more secure transaction.

The deal's architecture is particularly strategic. The legacy linear television business will be spun off into a new entity named "Discovery Global." This allows Netflix to secure premium content and streaming platforms without the burden of the declining cable TV segment. Co-CEOs Ted Sarandos and Greg Peters aim to finalize the acquisition within the next 12 to 18 months, anticipating rigorous antitrust scrutiny.

Operational Momentum and Market Reaction

Netflix continues to demonstrate strong operational performance. The finale of Stranger Things 5 provides a recent example, drawing 31.5 million views during the week of December 29 to January 4. This resulted in the strongest New Year's Day in the company's history and secured the series the #9 spot on Netflix's list of all-time most popular content.

A novel hybrid release strategy was also employed for the finale, which generated approximately $25 million in additional box office revenue. This approach signals to investors Netflix's evolving ability to monetize its intellectual property beyond pure subscription models—a significant consideration for valuing the upcoming integration of Warner's assets.

Despite these positive developments, Netflix shares traded around $90.63 in today's session, reflecting broader market caution. The focus now shifts to the execution of this monumental deal and its future impact on the streaming leader's financial trajectory.