Netflix's $83 billion acquisition of Warner Bros. Discovery: A game-changing deal in entertainment
Netflix, Movies, South African movies The impact of Netflix's historic acquisition of Warner Bros. Discovery on the streaming industry
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Streaming giant Netflix has sent shockwaves in the entertainment industry with the announcement that it will buy film and television studio Warner Bros. Discovery for nearly $83 billion. (R136,639,552)
This is the entertainment industry's biggest consolidation deal this decade.
The acquisition gives Netflix access to a vast film catalogue and streaming service HBO Max.
Over the decades, Warner Brothers has produced film classics including "Casablanca" and "Citizen Kane", as well as more recent blockbuster shows including "The Sopranos", "Game of Thrones" and the "Harry Potter" movies.
"Together, we can give audiences more of what they love and help define the next century of storytelling," said Ted Sarandos, co-CEO of Netflix, which has produced global hits including "Stranger Things", "KPop Demon Hunters" and "Squid Game".
Disney’s massive US$71-billion ( R1.21 trillion) takeover of Fox back in 2019 was long considered Hollywood’s benchmark mega-deal, until now.
The newly announced agreement places Warner Bros. Discovery’s value at about US $27.75 per share ( R474), giving the media giant an eye-watering equity valuation of roughly US $72 billion (R1.23 trillion), and an enterprise value of around US $82.7 billion ( R1.41 trillion) once debt is factored in.
Warner Bros. Discovery ended Thursday’s trading session on the Nasdaq at US $24.54 per share (R419).
“Today’s announcement brings together two of the world’s greatest storytelling powerhouses,” said David Zaslav, President and CEO of Warner Bros. Discovery, in a statement that set the global entertainment industry buzzing.
The boards of both companies have unanimously approved the deal, which is expected to be finalised within the next 12 to 18 months.
The announcement has sent shoxkwaves across the world and in South Africa, with many wondering where the deal leaves South African streamer Showmax, which has HBO Max on their platform. Netflix is a competitor to the Multichoice-owned streamer.
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