Warner Bros. Discovery Inc. has entered exclusive negotiations to sell its film and TV studios and HBO Max streaming service to Netflix Inc., according to people familiar with the discussions.
Netflix is offering a $5 billion breakup fee if regulators don't approve the deal, said the people, who asked not to be identified because the discussions are private. The two companies could announce a deal as soon as in the coming days, assuming talks don't fall apart, the people said.
Prior to the closing of the sale, Warner Bros. - valued at more than $60 billion overall - will complete the planned spinoff of cable channels including CNN, TBS and TNT.
The deal, if consummated, would bring seismic change to the entertainment industry, joining the world's dominant paid streaming service with one of Hollywood's oldest and most revered studios.
The acquisition marks a dramatic strategic shift for Netflix, which has never done a deal of this scope. The streaming pioneer grew to become Hollywood's most valuable company, without the benefit of a content library or studio, by licensing programs from others and then expanding into original content.
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