Amazon To Buy MGM Studios For $8.45B
UPDATE, MAY 26, 9:53 A.M. ET: Amazon and MGM have entered a definitive merger agreement under which Amazon will buy the movie production company for $8.45B. The deal is subject to regulatory approval.
Retail giant Amazon is in talks to buy movie studio Metro-Goldwyn-Mayer for between $8.5B and $9B in a deal that could close as soon as this week, CNBC reports.
Should Amazon pull the trigger on the sale, the company would acquire MGM's vast media holdings, including an interest in such popular fare as the James Bond franchise and full ownership of 4,000 movie properties such as Rocky, RoboCop, Stargate and The Pink Panther, as well as 17,000 television episodes. The company is also the producer of such TV shows as The Handmaid's Tale and Fargo.
MGM owns studio facilities, but the deal would have the potential to bolster Amazon in its bid for dominance in the retail universe by offering yet another reason for shoppers to come to its platform.
"Although most of the content on Prime Video doesn’t relate directly to products being sold on Amazon, it motivates consumers to stay on Amazon and that’s exactly where the connection between content and retail is going," Richard Kestenbaum wrote in Forbes.
Amazon's further move into content creation is, in other words, partly about competing with other media giants such as Disney and Netflix, but also about firming up the entire Amazon ecosystem. Already vastly strong, an even stronger Amazon would continue to syphon business from competitors, notably physical retailers.
A consortium of investors led by New York-based Anchorage Capital Group owns MGM and has been shopping the studio for months. Apple and Comcast had previously considered acquiring the studio, valuing it at about $6B, The New York Times reports.