Netflix has agreed to buy Warner Bros Discovery film and TV studios business in a $72 billion (£54 billion) deal.
The US streaming giant confirmed the deal on Friday after it had emerged as the front-runner to buy the business, which owns franchises such as Harry Potter, Batman and Game of Thrones, following an auction process.
It had battled with Paramount Skydance and Sky owner Comcast to buy the studio business, which also runs HBO and fellow streaming service HBO Max.
The deal could dramatically further reshape the established Hollywood film and TV industry, which has already faced significant upheaval amid the rapid growth of streaming.
Netflix said it will pay $ 27.75(£20.79) per share to investors in the Warner Bros Discovery business.
The streaming giant estimates it will find $2-3bn in savings, mostly through eliminating overlaps in the support and technology areas of the businesses.
Films made by Warner Bros will continue to be launched in cinemas, it said, and Warner Bros television studio will continue to be able to produce for third parties. Netflix will keep producing content exclusively for its own platform.
The deal will close after Warner Bros Discovery completes a proposed spin-off of its cable channels, which include CNN, TBS and TNT Sports in the UK.
Ted Sarandos, co-chief executive of Netflix, said: “Our mission has always been to entertain the world.
“By combining Warner Bros’ incredible library of shows and movies — from timeless classics like Casablanca and Citizen Kane to modern favourites like Harry Potter and Friends — with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we’ll be able to do that even better.
“Together, we can give audiences more of what they love and help define the next century of storytelling.”
David Zaslav, president and chief executive of Warner Bros Discovery, said: “Today’s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most.”
The cash and stock deal is worth $27.75 per Warner Bros share, with a total enterprise value - which includes the company's debts and the value of its shares -of about $82.7bn. The equity value, or cash price, is $72bn.
Commenting on the deal Danni Hewson, head of financial analysis at AJ Bell, said: "Netflix had quickly emerged as the frontrunner to take over the ailing Warner Bros Discovery's film and TV studios, so it came as no big surprise to learn it had got the 72 billion deal over the line. But the handshake is the easy bit, getting it past regulators is likely to be considerably more difficult, especially when you consider the political temperature.
"Paramount Skydance - owned by David Ellison, one of Donald Trump's biggest supporters - had been one of the rival suitors hoping that its bid to take over the whole kit and caboodle might win over the board.
"It could also be argued that Netflix is picking off the cherry on top of the Warner Bros empire and leaving the problem of what to do with the cable networks to someone else once that part of the business is spun off.
"For Netflix, the benefits are obvious. Adding the likes of Game of Thrones, Harry Potter and the DC Universe to its roster of content is a huge win, as is snapping up all those streaming subscribers that currently plump for HBO Max.”
