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Amazon Nears Deal To Buy Production House MGM Studios For $9 Billion: Report

Amazon is now inching closer to sign the deal of acquisition of Hollywood's MGM Studios. The talks fo the same is underway and an announcement can be expected

Amazon

Image: Shutterstock


Amazon is once again out to acquire a huge holding. According to a recent report, it might just sign the deal to acquire MGM Studios in Hollywood. MGM Studios are one of the oldest production houses in Hollywood. They are known for several live-action as well as animated movies. 

Amazon nearing the date to sign the deal with MGM Studios

Amazon's deal with MGM Studios is said to be almost $9 billion including debt. According to the Wall Street Journal, the US-based e-commerce giant will buy the veteran production studio, thus making MGM Studios a valuable asset for the company. According to the website, the two might announce the deal as early as this week. 

This deal with MGM Studios will mark the second-largest acquisition after the e-commerce giant bought Whole Foods for $13.7 billion back in 2017. Back in December 2020, MGM was valued at $5.5 billion approximately, including debt. The stock prices of the studio rose to $140 from $105 after the news of its deal with Amazon was published online. As of March 2021, MGM had around $2 billion in debt. 

The news of this MGM Studios and Amazon deal was revealed shortly after the news of AT&T combining its media assets with Discovery Inc and forming a new company, were announced. The talks about the MGM Studios-Amazon deal have been going on and off from both sides. The talks have once again begun in recent weeks, but there is no guarantee that they will reach an agreement. 

What does this deal bring for Amazon?

This deal with MGM will bring Amazon access to several classics such as Pink Panther, Singin' in the Rain, to name a few. The movies from the pre-1948 era have already been sold to Warner Bros including classics like The Wizard of Oz and Gone with the Wind. 

Amazon has eyed the entertainment market for a long time now. From acquiring titles to releasing their own production, Amazon has also spent money on acquiring licenses and live streaming rights. Currently, it is preparing for the TV series based on The Lord of the Rings. The first season of the said series is estimated at $465 million.

MGM Studios had entered a no CEO policy from 2018 after its then-CEO Gary Barber was found in preliminary talks with Apple Inc for a sale estimated at $6 Billion. Since then, MGM Studio is run by the "office of the CEO" which comprises executive across the company. 

(Image: Shutterstock)

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