NEW YORK (AP) — Netflix has struck a deal with Warner Bros. Discovery to buy the legacy Hollywood giant’s studio and streaming business for $72 billion.

The acquisition, announced Friday, would bring two of the industry’s biggest players in film and TV under one roof. Beyond its namesake television and motion picture division, Warner owns HBO Max and DC Studios. And Netflix has risen to dominance as a household name ubiquitous to on-demand content, while building its own production arm to release popular titles like “Stranger Things” and “Squid Game.”

The cash and stock deal is valued at $27.75 per Warner share, giving it a total enterprise value of approximately $82.7 billion. The transaction is expected to close after Warner separates its Discovery Global cable operations into a new publicly-traded company in the third quarter of 2026.

Shares of Warner Bros. rose nearly 3 percent in premarket trading while shares of Netflix and Paramount fell more than 2 percent.

Gaining Warner’s legacy studios would mark a notable shift for Netflix’s current movie theater footprint. Under the proposed acquisition, Netflix has promised to continue theatrical releases for Warner’s studio films — honoring Warner’s contractual agreements for movie releases.

Netflix has kept most of its original content within its core online platform. But there’s been few exceptions, such as limited theater screenings of a “KPop Demon Hunters” sing-a-long and its coming “Stranger Things” series finale.

As recently as October — when Warner signaled that it was open to a potential sale of its business — Netflix co-CEO Ted Sarandos reiterated on an earnings call that the company had been “very clear in the past that we have no interest in owning legacy media networks” and that there was “no change there.”

“We believe that we can be and we will be choosy,” Sarandos said at the time, without fully ruling out a potential bid for Warner.

Friday’s announcement arrives after a month-long bidding war for Warner Bros. Discovery. Rumors of interest from Netflix and NBC owner Comcast began bubbling up in the fall. But Skydance-owned Paramount, which completed its own $8 billion merger in August, had also reportedly made several all-cash offers backed heavily by CEO David Ellison’s family.

Paramount seemed like the frontrunner for some time — and unlike Netflix or Comcast, was reportedly vying to buy Warner’s entire company, including its cable business housing networks like CNN and Discovery.