Netflix is reportedly exploring a significant acquisition, having hired investment bank Moelis & Co as a financial advisor to evaluate a prospective offer for Warner Bros Discovery's studio and streaming business. This information comes from Reuters, citing three individuals with knowledge of the matter. Moelis & Co, notably, also advised Skydance Media during its successful acquisition of Paramount Global. Furthermore, Netflix has reportedly gained access to the necessary data room, which contains financial details crucial for making such a bid. However, no official statement has been issued by Netflix, Moelis, or Warner Bros Discovery regarding this potential deal.

A successful acquisition of Warner Bros' studio business would provide Netflix with control over some of the most popular and successful stories and characters globally. This includes highly coveted franchises such as Harry Potter and DC Comics. Beyond these major cinematic properties, Warner Bros' prolific television studio has produced many of Netflix's own biggest hits, including original series like "Running Point," "You," and "Maid." The deal would also integrate HBO and its companion streaming service, estimated by Reuters to add a collection of prestigious dramas and a substantial number of new subscribers to Netflix's portfolio. Currently, in India, JioStar holds the exclusive streaming rights for HBO, Max Original, and Warner Bros. content, following a deal inked in April 2023.

Regarding its growth strategy, Netflix CEO Ted Sarandos recently told investors that while the company has historically favored being "builders rather than buyers," it does consider acquisitions based on specific criteria. These opportunities are evaluated on factors such as the size of the offer and their potential to strengthen the company's entertainment value. Sarandos explicitly stated that Netflix would not be interested in acquiring Warner Bros Discovery's traditional cable television networks, which include legacy media channels like CNN, TNT, Food Network, and Animal Planet, reiterating a long-standing company stance during Netflix's Q3 results announcement.

On the other side of the potential deal, Warner Bros Discovery announced last week that it is actively evaluating its strategic options. This decision came after the company received three unsolicited offers, including from Paramount Skydance, to acquire the entire company. Warner Bros Discovery's board is considering whether to proceed with its previously planned split, which would separate its film and television studios, HBO, and the HBO Max streaming service from its television business, or to pursue a sale of all or parts of the company.

In summary, Netflix's potential acquisition of Warner Bros Discovery's studio and streaming assets could significantly enhance its content library, marking a notable shift in its growth approach towards strategic acquisitions. Concurrently, Warner Bros Discovery is at a pivotal juncture, evaluating multiple unsolicited offers and contemplating a major structural reorganization or sale.