Netflix Is Buying Warner Bros. Discovery for $72 Billion.

Core Insights - Netflix has announced its largest acquisition ever, planning to acquire certain assets from Warner Bros. Discovery for $72 billion, which is a shift from its typical reliance on self-produced content and licensing deals [1] Group 1: Acquisition Details - The acquisition includes the HBO Max streaming service and the Warner Bros. film studio, valuing the deal at $27.75 per share, leading to a total equity valuation of $72 billion for the assets [2] - Netflix will assume $10.7 billion in net debt from Warner Bros. Discovery and will take on an additional $50 billion in debt to finance the acquisition [3] - Warner Bros. Discovery's television networks, including TNT and CNN, are expected to be spun off before the deal is finalized, while Netflix plans to continue operating the Warner Bros. film and television studios [3] Group 2: Content Value - The acquisition brings popular franchises into Netflix's ecosystem, including "Friends," "The Big Bang Theory," HBO series like "The Sopranos" and "Game of Thrones," as well as the "Harry Potter" film franchise [4] Group 3: Market Reaction - Following the announcement, Warner Bros. Discovery shares rose by about 3% to $25.30, although this is still approximately 10% below the acquisition price, reflecting the anticipated regulatory hurdles and time until closing [5][6] - Investors in Warner Bros. Discovery must consider whether to hold through the deal's closing for potential upside or to cash out [6]