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Amazon prepares to acquire MGM Studios for USD 8.45 billion

Amazon MGM Studios

Source: The Wrap

According to recent reports, e-commerce giant Amazon is all set to acquire MGM Studios, the American media company to expand its media and entertainment portfolio. Amazon announced the news on Wednesday stating that it is buying MGM Studios for USD 8.45 billion which makes this deal Amazon’s second-largest of all time.

The OTT digital media and entertainment industry is striving through cutthroat competition with competitors like Netflix, Disney, Discovery and WarnerMedia as well. Amidst this battle to get the most customers onboard, Amazon has made the boldest move to turbocharging its ambitions into the streaming and entertainment industry.

Having said that, MGM Studios is primarily involved with the production and distribution of television shows and feature films which will now add to Amazon’s entertainment portfolio. As mentioned in a report by CNBC, MGM Studios’ catalogue consists of over 17,000 TV Shows and over 4,000 feature films which will help Amazon Studios to stand out in the industry, giving customers all the more reason to switch to Amazon Prime for content.

This deal is a strategic move made by Amazon to stand tall in the digital entertainment industry with Amazon Prime and compete head-to-head with the likes of Netflix and Disney. Discovery and WarnerMedia recently partnered up to merge their content database to compete with the same dominant competitors in the market. Yes, Discovery made a deal with WarnerMedia for USD 43 billion after the company’s spin-off from AT&T, according to sources. Having said that, Amazon is willing to make that high-level investment to remain competitive in the market and it is evident from the fact that it just announced its second-largest deal yet, the first one being the purchase of Whole Foods back in 2017 for USD 13.7 billion.

MGM Studios is a private company that has been seeking a buyer for several years now. The American media company will enrich Amazon’s entertainment film and TV shows catalogue with robust hits from Hollywood including the entire James Bond Franchise. According to the company profile on Crunchbase, Highland Capital Partners, Kempner Capital Management, Owl Creek Investments Anchorage Capital, Solus Alternative Asset and Davidson count as some of the existing investors in the company.

According to a report by CNBC, Amazon could be dealing with heightened anti-trust concerns after its announced acquisition of MGM Studios. The matter concerns Amazon having monopolistic power over third-party sellers in the e-commerce marketplace.

All in all, Amazon acquitting MGM Studios and combining their digital content is good news for customers who already own Amazon Prime. For those who don’t, Amazon just gave you a pretty compelling reason.




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