Home News Amazon wishes to acquire a film company MGM for US$9 billion

Amazon wishes to acquire a film company MGM for US$9 billion

by Ashish

Amazon is initiating acquisition negotiations with MGM.  This move will be the biggest movie of the e-commerce giant to advance into the entertainment industry so far. This acquisition will also expand Amazon’s film studio and streaming services Prime Video and IMDB business.

According to Variety reports, the transaction price is 9 billion U.S. dollars, and Mike Hopkins, the head of Amazon’s TV business unit, and Kevin Ulrich, chairman of MGM’s board of directors, are directly orchestrated potential transactions. Currently, an Amazon spokesperson declined to comment.

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Amazon’s interest in MGM comes at a time when traditional Hollywood is undergoing a new round of mergers and acquisitions. For example, Discovery will take over WarnerMedia from AT&T. Entertainment companies hope to use these mergers and acquisitions to expand their scale to better compete with Netflix and Disney.

MGM has a huge film library, including the enduring “007” series and other films such as “Rocky” and “Pink Panther”. The company also owns the Epix cable TV channel and has produced TV series such as “The Handmaid’s Tale” and “Ice and Blood Storm”, as well as reality shows such as “The Winner” and “Survivor”.

The status of the negotiations between Amazon and MGM is currently unknown, but it may end fruitless in the end. Other companies also hope to participate in the bidding. MGM is jointly controlled by a number of private equity companies, including Anchorage Capital Group, Highland Capital Management, and Solus Alternative Asset Management.

These companies hired Morgan Stanley to sell the business late last year. In January of this year, it was reported that Amazon had started exploratory communication on MGM’s issue. One of the big issues is price.

MGM’s financial statement shows that the company’s growth rate is small: its revenue last year was US$1.496 billion, a slight decline from 2020, but it achieved an increase from US$1.18 billion in 2016.

Amazon told employees a few days ago that Jeff Blackburn, a former executive who has been in charge of its entertainment business for a long time, will return to the company to take charge of the new global media group. Blackburn took a one-year vacation and then announced his withdrawal earlier this year.

He joined venture capital firm Bessemer before but decided to quit a few weeks later. MGM signed a cloud computing agreement with Amazon Web Services (AWS) in December last year.

(Via)

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