Amazon Will Acquire MGM For $8.45 Billion

The Amazon-MGM deal represents tech giant Amazon’s biggest entry into the entertainment content business, as well as its second-largest acquisition behind its $13.7 billion deal to buy Whole Foods in 2017, reports the Wrap.

“MGM has a vast catalog with more than 4,000 films—”12 Angry Men,” “Basic Instinct,” “Creed,” “James Bond,” “Legally Blonde,” “Moonstruck,” “Poltergeist,” “Raging Bull,” “Robocop,” “Rocky,” Silence of the Lambs,” “Stargate,” “Thelma & Louise,” “Tomb Raider,” “The Magnificent Seven,” “The Pink Panther,” The Thomas Crown Affair” and many other icons—as well as 17,000 TV shows—including “Fargo,” “The Handmaid’s Tale,” and “Vikings”—that have collectively won more than 180 Academy Awards and 100 Emmys,” Mike Hopkins, senior vice president of Prime Video and Amazon Studios, said in a statement on Wednesday. 

The deal follows more than a week of news reports that Amazon was on the verge of completing an acquisition of MGM. The reported price tag was $9 billion. Rumors had been swirling since December that MGM was exploring a sale with an asking price of a reported $5.5 billion, with the 97-year-old studio generally assumed to be pinning its sale hopes on the value of its legacy library that includes the James Bond and Rocky franchises.

MGM also produces the TV hits “The Handmaid’s Tale” and “Vikings,” as well as reality shows “Survivor” and “The Voice.” The studio’s library includes 4,000 film titles and 17,000 hours of TV programming, all catnip to media companies looking to feed their hungry streaming services with content.

The deal comes on the heels of AT&T’s recent deal to spin off WarnerMedia in a merger with Discovery, another indicator of the need for companies with streaming services to gobble up smaller studios or content libraries to feed the streaming beast.

Along with its extensive film and TV library, MGM also owns premium cable network Epix, which earlier this year expanded its partnership with Paramount to make films licensed to the network available on Paramount+.

Not only does Amazon — with a market cap of more than $1.6 trillion — have deep pockets, but gaining access to MGM’s content is in keeping with its voracious appetite for building its media division. Amazon spent $11 billion in 2020 on movies, TV shows and music for its Amazon Prime service.