In a groundbreaking move, Netflix has reached an agreement with Warner Bros Discovery to acquire the iconic Hollywood studio along with its streaming operations for a staggering $72 billion, which translates to approximately $108 billion in Australian currency. This major acquisition announcement was made overnight and is set to reshape the landscape of the entertainment industry.

The merger will unite two titans of the film and television world under a single entity. Besides its renowned film and television production units, Warner Bros also boasts ownership of HBO Max and DC Studios. Meanwhile, Netflix has carved out a significant space in the realm of on-demand content, gaining global recognition with its original productions such as Stranger Things and Squid Game.

The transaction, a combination of cash and stock, is valued at $27.75 per Warner share, bringing the total enterprise value to around $82.7 billion, or $124.55 billion in Australian dollars. This acquisition is slated for completion following Warner’s separation of its Discovery Global cable operations into a separate publicly traded entity, anticipated in the third quarter of 2026.

Following the announcement, Warner Bros saw its shares rise nearly 3% in premarket trading, while Netflix and Paramount experienced a decline of over 2% in their share values.

This strategic acquisition offers Netflix an opportunity to expand its influence in the movie theater sector. Netflix has committed to maintaining theatrical releases for Warner’s films, respecting the existing agreements Warner has in place for cinema releases, thereby ensuring the legacy of Warner’s storied film productions continues to thrive in theaters.

Netflix has kept most of its original content within its core online platform. But there have been a few exceptions, such as limited theatre screenings of a KPop Demon Hunters sing-a-long and its coming Stranger Things series finale.

As recently as October — when Warner signalled that it was open to a potential sale of its business — Netflix co-CEO Ted Sarandos reiterated on an earnings call that the company had been “very clear in the past that we have no interest in owning legacy media networks” and that there was “no change there”.

“We believe that we can be and we will be choosy,” Sarandos said at the time, without fully ruling out a potential bid for Warner.

Friday’s announcement arrives after a monthslong bidding war for Warner Bros Discovery. Rumours of interest from Netflix, as well as NBC owner Comcast, started bubbling up in the northern hemisphere autumn. But Skydance-owned Paramount, which completed its own $US8 billion merger in August, had also reportedly made several all-cash offers backed heavily by CEO David Ellison’s family.

Paramount seemed like the frontrunner for some time — and unlike Netflix or Comcast, was reportedly vying to buy Warner’s entire company, including its cable business housing networks like CNN and Discovery.