Warner Bros. Discovery (NASDAQ:WBD) traded higher in extended hours on Friday after multiple media outlets reported that Netflix (NASDAQ:NFLX) has entered into exclusive talks to acquire the company’s film and television studios along with key streaming assets.

According to the reports, Netflix has put forward an offer valuing the targeted units at $28 per share. The assets under discussion include major brands such as HBO and DC Comics, cementing Warner Bros.’ reputation as a Hollywood powerhouse.

Netflix shares edged slightly lower after the news, while Warner Bros. Discovery saw gains.

If the deal is completed, it would significantly reshape the competitive landscape of the entertainment industry, giving Netflix control over some of the most recognizable franchises in the world. Warner Bros.’ library includes hits such as “Game of Thrones” and “Harry Potter,” together with intellectual property tied to numerous premium titles.

The media company reportedly received a fresh round of bids earlier this week from Netflix, Paramount Skydance, and Comcast after the trio submitted initial acquisition proposals. Paramount’s approach, according to the Wall Street Journal, sought to acquire all of Warner Bros., including cable mainstays like CNN and TBS. Comcast’s interest centered on Warner Bros.’ studios and the HBO Max streaming platform.

The Wall Street Journal also reported that Netflix and Warner Bros. are expected to finalize a deal soon, citing sources familiar with the matter. The publication added that Warner Bros. is simultaneously pursuing plans to split its business into two units — one consisting of studios and streaming, and another made up of its cable networks — ahead of any agreement with Netflix.

Analysts have already begun weighing in on the potential implications of such a merger, pointing to both strategic changes and possible regulatory scrutiny.

One area of concern stems from the different distribution models used by the companies. Warner Bros. traditionally releases films theatrically before placing them on HBO Max, while Netflix typically prioritizes launching movies directly on its streaming platform.

“In the event of a deal, Netflix might choose to shift the distribution and monetization of Warner Bros and HBO’s content away from theaters and third parties onto its own platform exclusively,” analysts at Morgan Stanley wrote in a recent note.

At the same time, regulators and lawmakers have reportedly expressed reservations about the level of market power Netflix could gain if HBO Max’s extensive catalog were folded into its service, raising questions about competition in the streaming sector.

Warner Brothers Discovery stock price

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