In a significant industry shake-up, Netflix has finalized a $72 billion agreement to acquire the studio and streaming services of Warner Bros. Discovery.

Announced this past Friday, the merger will unite two major entertainment titans. Warner Bros. Discovery, beyond its storied film and television divisions, also holds HBO Max and DC Studios. Meanwhile, Netflix, a global leader in streaming, has made a name for itself with original productions like “Stranger Things” and “Squid Game.”

The deal, a mix of cash and stock, values Warner at $27.75 per share, bringing the total enterprise valuation to approximately $82.7 billion. The transaction is set to be finalized following Warner’s spin-off of its Discovery Global cable operations into a new, publicly listed company, projected for the third quarter of 2026.

In response to the announcement, Warner Bros.’ shares climbed nearly 3% in premarket trading, whereas Netflix and Paramount saw a drop of over 2% in their share values.

With the acquisition, Netflix will significantly enhance its presence in traditional movie theaters. The company has assured that Warner’s films will continue to enjoy theatrical releases, respecting all existing agreements for such premieres.

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

As recently as October — when Warner signaled 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 months-long bidding war for Warner Bros. Discovery. Rumors of interest from Netflix, as well as NBC owner Comcast, started bubbling up in the fall. But Skydance-owned Paramount, which completed its own $8 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.