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Amazon will acquire MGM for $8.5B in tech giant’s second-largest deal to boost Bezos’ media empire

( Picture; GeekWire Illustration)

It’s official: Amazon will purchase MGM for $eight.45 billion. The Seattle tech big on Wednesday announced the deal, which might be its second-largest acquisition behind the $13.7 billion buy of Entire Meals in 2017.

The deal is topic to regulatory approval and comes as Amazon faces extra antitrust scrutiny. Earlier studies of the deal already drew criticism from lawmakers.

Buying the historic Hollywood studio shall be a serious boon to Amazon’s rising media arm. Amazon is already an energetic participant in movie and tv with content material it creates and acquires via Amazon Studios and that it broadcasts via its streaming service, Prime Video. Amazon additionally owns

MGM would offer Amazon with greater than four,000 movies and 17,000 TV exhibits which have collectively gained greater than 180 Academy Awards and 100 Emmys. The movie library consists of the James Bond and Rocky franchises, in addition to tv exhibits resembling “The Handmaid’s Story” and “Fargo,” and actuality exhibits resembling “Shark Tank” and “Survivor.”

“The actual monetary worth behind this deal is the treasure trove of IP within the deep catalog that we plan to reimagine and develop along with MGM’s proficient workforce,” Mike Hopkins, SVP of Prime Video and Amazon Studios, stated in a press release.

A privately held firm, MGM was valued round $5.5 billion, together with debt, final December, in keeping with the Wall Avenue Journal. It had reportedly been searching for a purchaser for a number of years.

The deal indicators Amazon’s continued funding in its media arm to compete in opposition to the likes of different streaming giants resembling Netflix, Hulu, and Disney. Amazon makes use of Prime Video as one among many perks — together with free transport, cloud storage, and so on. — for its $119/yr Prime membership, which counts 200 million members globally. Amazon spent $11 billion on video and music content material final yr, up from $7.eight billion the yr prior, CNBC reported.

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Brad Stone, creator of the brand new ebook “Amazon Unbound,” wrote this week that Bezos gathered Amazon media execs in 2017 and stated, “I would like my Sport of Thrones.” Since then Amazon has confronted growing strain from different media giants that personal giant film and TV franchises.

“Towards that aggressive panorama, Bezos doesn’t simply want a tv collection with dragons and many blood. (Although, he would possibly get that as nicely, from the upcoming Lord of the Rings show.),” Stone wrote in Bloomberg’s Absolutely Charged publication. “He wants a studio with a vault of mental property that may produce these varieties of world blockbusters at an everyday clip.”

Recode’s Peter Kafka famous that Amazon desires MGM “not a lot as a result of it desires to personal streaming, however as a result of it desires you to maintain coming to Amazon.”

The deal additionally gives clues to the return of longtime exec Jeff Blackburn, who retired earlier this yr, joined a enterprise capital agency for 5 weeks, however then determined to return again to steer a brand new “World Media & Leisure” group that may embrace Prime Video and Amazon Studios, Music, Twitch, and extra. He begins June 7.

MGM and Amazon Internet Companies signed a cloud computing agreement in December to maneuver the studio’s content material and distribution efforts to the cloud and to assist the studio develop “new enterprise fashions” and “new income alternatives,” The Hollywood Reporter beforehand reported.

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