The online shopping giant Amazon.com Inc, on Wednesday, announced that it is buying MGM, the movie and TV studio which has James Bond, “Legally Blonde” and “Shark Tank” in its kitty. Amazon hopes to accelerate its video streaming service offering by adding more options for its audience.
In $8.45 billion, Amazon is acquiring MGM, making it the company’s second-largest acquisition after the acquisition of the grocer Whole Foods for nearly $14 billion in 2017.
“The real financial value behind this deal is the treasure trove of IP in the deep catalogue that we plan to reimagine and develop together with MGM’s talented team. It’s very exciting and provides so many opportunities for high-quality storytelling,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios.
MGM has the world’s famous logo of the roaring lion. Founded in 1924, in the era of silent films, MGM is one of the oldest Hollywood studios. It also owns the Epix cable channel and makes chartbuster TV shows like “Fargo”, “Vikings” and “Shark Tank.”
Amazon’s Prime Video has a lot of competitors like Netflix Inc, Walt Disney Co’s Disney+, HBO Max and Apple Inc’s Apple TV+. The companies are spending more and expanding in international markets, intending to tap on the pandemic-led shift to binge-watching shows online.
The deal is yet to be approved by the customary authority, but with this deal Amazon, Amazon will emerge as a stronger competitor in the market. Regulators around the world are scrutinizing the business practices of Amazon, specifically, it uses the information from businesses that sell goods on its site and the practices behind using the information in creating its Amazon-branded products.
The House Judiciary Committee came up with a report in October calling for a possible breakup of Amazon and others, setting up a tough route to buy other businesses and imposing new norms to safeguard competition.
In 1995, Amazon started as an online bookstore, now it has a $1.6 trillion diversified business. It is involved in a delivery business network that delivers almost every product; also, it has a cloud-computing business and sending over 3,200 satellites into space to beam internet service to the Earth is a streamlined plan.