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Amazon Buys MGM Studios for $8.45 Billion

In a joint statement, the two companies noted that Amazon will “help preserve the legacy and film catalog” of the Hollywood studio, which has a content archive with 4,000 titles dating back to the 1920s

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The e-commerce giant Amazon announced Wednesday the purchase of the Metro-Goldwyn-Mayer (MGM) film studio for 8.45 billion dollars, the second-largest acquisition in its history, after several days of speculation.

In a joint statement, the two companies noted that Amazon will “help preserve the legacy and film catalog” of the Hollywood studio, which has a content archive with 4,000 titles dating back to the 1920s.

“The real financial value behind this deal is the treasure trove of intellectual property in the vast catalog that we plan to reimagine and develop together with the talented team at MGM,” Mike Hopkins, the senior vice president of Prime Video and Amazon Studios, said in the release.

The companies considered that MGM’s century-long track record “complements the work of Amazon Studios, which has focused primarily on producing television programs” and that taking this step confirms its ambitions to expand into the entertainment sector.

The deal, subject to the green light from regulators, coincides with recent concentration moves in this market following last week’s announcement of the merger of AT&T-owned WarnerMedia and Discovery, which will create a new competitor for the streaming leaders.

Kevin Ulrich, MGM’s chairman of the board, who had been searching for a buyer for several months, highlighted in the note the “incredible transformation” of the studio and thanked the workers for their efforts to achieve this “historic day”.

“I am very proud that the Lion of MGM, which has long evoked the golden age of Hollywood, will continue its successful history and that the idea born from the creation of the United Artists will endure as the founders originally intended, led by talent and their vision,” he added.

MGM’s catalog spans film, including the “James Bond” franchise and classics such as “Gone with the Wind,” but also 17,000 TV series, with recent hits such as “The Handmaid’s Tale,” “Fargo” or “Vikings,” and collectively has won 180 Oscars and 100 Emmys.

“Through this acquisition, Amazon would empower MGM to continue doing what they do best: telling great stories,” noted the e-commerce giant, which scores its second-largest transaction following the purchase of Whole Foods supermarkets in 2017 for $13.7 billion.

After the news was confirmed, Amazon shares barely noticed changes on Wall Street in pre-opening trading, trading up 0.47%.

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