By Jack M. Germain
May 26, 2021 2:34 PM PT
Amazon and Metro Goldwyn Mayer (MGM) announced a definitive merger agreement for Amazon to acquire MGM for $ 8.45 billion on Wednesday. Completion of this transaction is subject to regulatory approvals and other customary closing conditions.
MGM has mainly made feature films and television shows since it turned on its studio cameras in 1924. Now MGM will complement Amazon Studios to “preserve the heritage and catalog of films”.
According to both companies, the merger will give Amazon customers better access to MGM’s existing plants.
MGM will bring more than 4,000 films and 17,000 TV shows to the Amazon table. In total, MGM productions have won more than 180 Academy Awards and 100 Emmy awards over the years. The studio employs around 800 people worldwide.
Amazon receives this extensive program catalog to strengthen its Prime Video service with an overstock of well-known entertainment titles. Even more enticing for viewers is the potential to see new originals that Amazon can create by accessing MGM properties.
“The real financial value of this deal is in the treasure trove of the vast catalog we are looking to re-launch and develop with the talented team at MGM. It is very exciting and offers so many opportunities for high-quality storytelling,” said Mike Hopkins, senior Vice President of Prime Video and Amazon Studios.
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Not the first attempt
MGM Holdings Inc. currently owns a collection of private equity firms. This group includes Anchorage Capital Group, Highland Capital Management, and Solus Alternative Asset Management.
The company reportedly has a market value of approximately $ 5.5 billion based on privately traded stocks and debt. Amazon is taking on MGM’s debt as part of the deal. MGM will continue to operate as a label under the Amazon brand.
Various news sources have reported the possibility of an impending sale earlier. Some reports suggested that the high asking price drove away some early interest.
First reports that MGM was on the market came out last December. The first report of Amazon wooing MGM for the purchase surfaced last week.
Liquid film industry
The MGM purchase comes at a time of significant consolidation in the movie industry, especially as streaming companies are looking to bolster their content libraries to compete with Netflix and Disney.
AT&T, which zipped its TV and video offerings, announced a definitive agreement on May 17, WarnerMedia’s premium entertainment, sports and news assets with the leading property and international entertainment and sports companies from Discovery to create a stand-alone global entertainment company. That deal created the second largest media company in the world by revenue and was only behind Disney.
Both companies have their own streaming services – HBO Max and Discovery Plus. This deal could result in them being merged into a single service.
Amazon’s purchase of MGM is the giant retailer’s second-largest acquisition. The purchase of Whole Foods in 2017 for $ 13.7 billion remains the largest to date.
Lion roar not silenced
When announcing the deal, Hopkins listed some of the well-known cinematic properties that were included in the deal with Amazon. These include: “12 Angry Men”, “Basic Instinct”, “Creed”, “Rocky”, “Legal Blonde”, “Moonstruck”, “Poltergeist”, “Raging Bull” and “Robocop”.
These classic films also include: “Silence of the Lambs”, “Stargate”, “Thelma & Louise”, “Tomb Raider”, “The Magnificent Seven”, “The Pink Panther”, “The Thomas Crown Affair” and “The James.” “Bond series.
“I am very proud that MGM’s Lion, long remembering Hollywood’s Golden Age, will continue its story, and the idea that grew out of United Artists lives on in a way that the founders originally did Had intended your vision driven by talent and talent. The ability to align the history of MGM with Amazon is an inspiring combination, “said Kevin Ulrich, chairman of MGM.
With MGM titles on the shelves, Amazon is able to grow its video business. The popular Amazon Prime membership currently includes access to thousands of Prime Video titles at no additional cost.
Around 200 million people worldwide subscribe to Amazon Prime. Over 175 million videos streamed last year. These sums will no doubt increase as Amazon customers access the MGM titles.