Amazon may be close to acquiring longtime film giant MGM Holdings in a buyout that is reported to be announced sometime this week.
According to The Wall Street Journal, those familiar with the matter report Amazon will purchase MGM for nearly $9 billion. The deal has been in talks for quite a while, but a formal process reportedly had not begun until late last year, when investment banks LionTree LLC and Morgan Stanley were hired to oversee the deal. While the two companies have seen on and off discussion on the acquisition over the course of the year, sources suggest the deal has become more serious over the past few weeks.
This would mark the second-largest acquisition from Amazon, which previously purchased Whole Foods in 2017 for $13.7 billion. It would spark a more focused approach from Amazon into the film and TV genres, given MGM's history and large-scale productions, with franchises like The Handmaid's Tale, James Bond and the premium network Epix. MGM is also responsible for classics like Singin' in the Rain, Rocky and The Pink Panther.
With Amazon looking to increase its streaming presence with Prime Video, the deal would give the e-commerce giant a large library of titles to be added to the platform, potentially driving up subscriptions to the video service. The company has continued to invest billions in the service overall, focusing on film, television and live sports entertainment to supplement the services offered. Upcoming projects include the Lord of the Rings TV series and theatrical acquisitions like the Chris Pratt-led The Tomorrow War.
MGM has had a relatively rocky history over the past decade, firing its previous chief executive Gary Barber in 2018 for having private conversations with Apple about a $6 billion acquisition. The company has not had a CEO since then, instead opting for an "office of the CEO" represented by a board of executives across the company. More recently, MGM was the subject of a lawsuit from Starz for violating an exclusive licensing agreement, and 7% of its staff were laid off following Covid-19, with senior management taking pay cuts as well.
While talks on the acquisition are reportedly close to their conclusion, there is still no guarantee that the talks will reach a definitive answer or that they won't be derailed at the last minute. Regardless, according to sources, we may find out the details of the discussion very soon.
Source: The Wall Street Journal
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