Netflix is achieving complete vertical integration through its $82.7 billion acquisition of Warner Bros. Discovery. This definitive agreement provides Netflix with full control over content creation, production, and distribution, creating a self-sufficient entertainment ecosystem that can operate independently of external content providers and licensing arrangements.
Warner Bros. Discovery shareholders will receive $27.75 per share under the transaction terms, establishing total equity value at approximately $72.0 billion. The enterprise value of $82.7 billion includes Warner Bros. Discovery’s comprehensive portfolio of assets—production studios, content libraries, distribution channels, and creative talent. The unanimous board approvals signal strong confidence in the strategic value of achieving full vertical integration.
Netflix co-CEO Ted Sarandos highlighted the operational efficiencies gained through vertical integration. He described how owning Warner Bros.’ production capabilities alongside Netflix’s distribution platform will streamline content development, reduce costs, and accelerate time-to-market for new entertainment. This merger eliminates dependencies on external studios and provides Netflix with complete control over its content pipeline.
Warner Bros. Discovery CEO David Zaslav praised the merger as creating the optimal structure for modern entertainment companies. He emphasized that vertical integration enables better coordination between content creation and audience preferences, resulting in more relevant and engaging entertainment. The transaction reflects both companies’ belief that integrated operations provide decisive advantages in an increasingly competitive and fast-moving entertainment marketplace.
