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Netflix has agreed to buy warner brothers Discovery film and TV studio business in deal worth US$72bn (£54bn).
The US streaming giant confirmed the deal on Friday after emerging as the front runner to buy the business, which owns franchises like Harry Potter and Batman, following an auction process.
It had a war with Paramount skydance And Sky owner Comcast bought the studio business, which also runs hbo and fellow streaming service HBO Max.
The deal could dramatically reshape established Hollywood film TV industryWhich has already faced significant upheaval amid the rapid growth of streaming.
Netflix’s owners said they expect to maintain Warner Bros.’s existing operations and continue to release films in theaters.
Netflix said it would pay investors $27.75 (£20.79) per share in the Warner Bros. Discovery business.
The deal will close after Warner Bros. Discovery completes the proposed spin-off of its cable channels, which include CNN, TBS and TNT Sports in the UK.
As a result, the process is not expected to be completed until at least the third quarter of next year.
Still, the deal is likely to face significant scrutiny from regulators in the US and Europe.
Netflix co-chief executive Ted Sarandos said, “Our mission has always been to entertain the world.
“With Warner Bros.’s incredible library of shows and movies – from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends – along with our culture-defining titles like Stranger Things, Kpop Demon Hunters and Squid Game, we’ll be able to do even better.
“Together, we can give audiences everything they love and help define the next century of storytelling.”
Netflix said the move will provide it with a deeper library of film and TV content for its subscribers.
It will also enhance its studio capabilities, allowing the company to expand its production capacity and increase investment in original content in the long term.
David Zaslav, chairman and chief executive of Warner Bros. Discovery, said: “Today’s announcement connects two of the world’s greatest storytelling companies to bring even more people the entertainment they love to watch most.”
Netflix shares fell slightly after the deal was announced.
Danny Hewson, head of financial analysis at AJ Bell, said: “Spending so much cash will never be a happy share price, but there is potential for considerable cost savings if this deal can clear those key regulatory hurdles quickly.
“How much of those savings are passed on to streaming platform customers or whether Netflix will have too much pricing power remains to be seen, this is one of the areas that will face a tremendous amount of scrutiny in the coming months.”