(GNB Desk)- Amazon and MGM Wednesday announced that they have entered into a definitive merger agreement under which Amazon will acquire MGM for a purchase price of $8.45 billion.
MGM is a leading entertainment company focused on the production and global distribution of film and television content across all platforms. The company owns one of the world’s deepest libraries of premium film and television content. MGM has nearly a century of filmmaking history and complements the work of Amazon Studios, which has primarily focused on producing TV show programming.
MGM’s catalog includes a library of over 4,000 films and 17,000 television shows. TV shows include “Fargo” and “The Handmaid’s Tale.” Films of MGM include, The James Bond, Pink Panther, RoboCop and Rocky franchises, and films “The Silence of the Lambs.” are included in that library.
The deal has a valuation of $8.45 billion and Amazon will now have the massive library of film and TV shows it will offer for Prime Video content coffers.
MGM is currently owned by hedge funds including Anchorage Capital Group. It has been seen as a takeover target for years. recently advisers were added to staff to seek offers for the sale of MGM.
“MGM has a vast catalog with more than 4,000 films—12 Angry Men, Basic Instinct, Creed, James Bond, Legally Blonde, Moonstruck, Poltergeist, Raging Bull, Robocop, Rocky, Silence of the Lambs, Stargate, Thelma & Louise, Tomb Raider, The Magnificent Seven, The Pink Panther, The Thomas Crown Affair, and many other icons—as well as 17,000 TV shows—including Fargo, The Handmaid’s Tale, and Vikings—that have collectively won more than 180 Academy Awards and 100 Emmys,” Mike Hopkins, Senior Vice President of Prime Video and Amazon Studios said in a statement. “The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team. It’s very exciting and provides so many opportunities for high-quality storytelling, he added.”
In a statement, Kevin Ulrich, Chairman of the Board of Directors of MGM said- “It has been an honor to have been a part of the incredible transformation of Metro Goldwyn Mayer. To get here took immensely talented people with a true belief in one vision. On behalf of the Board, I would like to thank the MGM team who have helped us arrive at this historic day.” “I am very proud that MGM’s Lion, which has long evoked the Golden Age of Hollywood, will continue its storied history, and the idea born from the creation of United Artists lives on in a way the founders originally intended, driven by the talent and their vision. The opportunity to align MGM’s storied history with Amazon is an inspiring combination.”
A$9 billion, the MGM takeover would be Amazon’s largest acquisition since the purchase of Whole Foods in 2017 for $13.7 billion. Amazon paid $11 billion on content for its streaming video and music services last. The company has also agreed to pay approximately $1 billion a year on NFL rights.
Completion of this transaction is subject to regulatory approvals and other customary closing conditions, Amazon said.
The deal is set to close this coming Tuesday. It will certainly give Amazon the competitive edge in the streaming wars.
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