Netflix Inc. (NFLX) announced Friday it will acquire Warner Bros Discovery (WBD) in a deal valued at approximately $82.7 billion, marking the streaming giant's largest transaction ever.

The cash and stock deal values Warner Bros at $27.75 per share. The transaction is expected to close after Warner Bros completes the separation of its cable networks unit from the rest of its businesses, now anticipated in the third quarter of 2026.

Streaming Giant Overcomes Deal Hesitancy

After a turbulent final round of offers on Thursday, Netflix emerged victorious over rival suitors, including Paramount Skydance Corp. (PSKY), securing the winning bid for WBD.

For a company that's never done anything close to a deal this size, the appeal is straightforward: Warner's blockbuster franchises—Batman, Harry Potter, Game of Thrones—would supercharge Netflix's already formidable global content engine.

"Our mission has always been to entertain the world," said Ted Sarandos, co-CEO of Netflix.

"Together, we can give audiences more of what they love and help define the next century of storytelling," Sarandos added.

Expanding the Content Library

Netflix expects the broader selection of premium series and films will help attract and retain more subscribers, drive higher engagement, and generate additional revenue and operating income.

Warner Bros Discovery's catalog—including The Big Bang Theory, The Sopranos, The Wizard of Oz, and the DC Universe—will join Netflix's existing portfolio of hits like Bridgerton, Adolescence, Stranger Things, and Squid Games.

The Los Gatos, California-based streaming company also projects at least $2-3 billion in annual cost savings by year three. Management expects the deal to boost GAAP earnings per share by the second year post-closing.

But here's where it gets tricky: the deal now enters the regulatory gauntlet in Washington. Intense antitrust scrutiny and potential opposition from the Department of Justice over further media consolidation represent significant obstacles to completing the merger.

In Friday premarket trading, Netflix stock fell more than 2%, while Warner Bros Discovery climbed around 3%.