Netflix, one of the world’s most popular streaming businesses, is acquiring one of the most iconic film studios: Warner Bros. Discovery.
Netflix announced on Friday morning that it is buying Warner Bros. at a price of $27.75 per share, or around $82.7 billion.
The deal will merge Netflix with another popular streamer, HBO, and narrow the competition field, bolstering the company against Disney’s streaming portfolio.
Netflix competed with Paramount and Comcast to acquire Warner Bros. Paramount expressed concerns that the bidding process was unfair and that Warner Bros. favored Netflix as its new owner.
Netflix denied the allegation, saying it “robustly” complied with its fiduciary obligations.
“Please be assured that the WBD Board attends to its fiduciary obligations with the utmost care, and that they have fully and robustly complied with them and will continue to do so,” the company wrote.
Earlier this month, Paramount warned that Netflix would not receive regulatory approval.
“The simple truth is that a deal with Netflix as the buyer likely will never close … Netflix is the only remaining Big Tech company that has not faced serious global antitrust enforcement, but attempting to acquire the WBD assets will change that,” the company’s attorneys wrote in a letter.
Federal Communications Commission Chairman Brendan Carr told the Guardian that he doubted the commission would be involved if Paramount had acquired Warner Bros.
“I’d be very surprised if there was an FCC role at all in that type of transaction,” Carr said, adding that he was “not focused on the rumor mills around those transactions.”
White House officials have reportedly discussed antitrust concerns with the deal. There are questions about whether it would give Netflix too much power over the movie industry.
“Basically, everyone agreed that Netflix presents unique antitrust concerns, and if it won the bidding war, it would be one long slog and touch off an investigation along the lines of those of Google and Amazon,” a government official told the New York Post.
Paramount owner and Trump ally David Ellison met with White House officials on Wednesday in an effort to influence the government’s stance on Netflix’s possible acquisition of Warner Bros. Ellison’s father, Larry Ellison, is the second-richest person in the world and a Trump ally.
With the acquisition by Netflix, HBO franchises such as The Big Bang Theory, The Sopranos, Game of Thrones, The Wizard of Oz, and the DC Universe will be added to Netflix.
“Our mission has always been to entertain the world,” Ted Sarandos, co-CEO of Netflix, said in a press release.
“By combining Warner Bros.’ incredible library of shows and movies—from timeless classics like Casablanca and Citizen Kane to modern favorites 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,” he added.
It’s unclear whether HBO will be merged with Netflix’s streaming service or if the streaming services will remain separate.
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The deal is pending regulatory approval and is expected to be completed in the third quarter of next year. If approval fails, Netflix has offered Warner Bros. a $5 billion break-up fee to compensate.
Investors favored Warner Bros. and booed Netflix during Friday morning trading. Netflix’s share price fell around 4% in pre-market trading, while Warner Bros. surged around 3.8%.
