Netflix wins bidding war over Warner Bros. Discovery in an $83 billion deal

The bidding war for Warner Bros. is over. Discovery (WBD) is officially in the works, as the entertainment giant and Netflix (NFLX) announced an $83 billion deal on Friday.

Warner Bros. plans to Discovery to continue a previously planned split, which would involve spinning off its cable TV channels including CNN and TBS into a standalone business, leaving the remaining studios that make the company’s TV, movies and streaming services to be acquired by Netflix for $27.75 per share. The two companies expect the deal to be closed in the third quarter of next year.

Netflix co-CEO Ted Sarandos said on Friday that the merger with Warner Bros. Discovery will help the two companies “define the next century of storytelling.”

Warner Bros. shares were unchanged. Discovery traded little in premarket trading on Friday, while Netflix shares fell 3.5% after the announcement.

Late Thursday night, reports emerged that Netflix and Warner Bros. Discovery has entered exclusivity deal talks, as rival bidders Paramount Skydance (PSKY) and Comcast (CMCSA) look to exit the race.

The bidding war began earlier this year, when Paramount began making offers to acquire all of Warner Bros.’ stock. Discovery after the company completed its own merger with the Ellison family’s Skydance company. Netflix and Comcast later entered the race.

Now, the deal may face regulatory scrutiny over whether it will make Netflix too dominant a player in streaming. Paramount reportedly argued that the industry would become very powerful with a Netflix win.