Amazon Strikes Deal To Buy Movie Giant MGM For $8.45 Billion

Amazon Strikes Deal To Buy Movie Giant MGM For $8.45 Billion

May 26, 2021 at 05:07PM

In a blockbuster deal, Amazon has agreed to buy Hollywood studio MGM and its legendary catalog and roaring lion logo for $8.45 billion.

“The real financial value behind this deal is the treasure trove” of 4,000 films that is MGM’s catalog of movies, said Mike Hopkins, senior vice president of Prime Video and Amazon Studios. In a press release, he said that Amazon plans to “reimagine and develop” MGM’s films.

“I am very proud that MGM’s lion, which has long evoked the golden age of Hollywood, will continue its storied history — and the idea born from the creation of United Artists lives on in a way the founders originally intended, driven by the talent and their vision,” said Kevin Ulrich, chairman of MGM’s board of directors.

MGM’s movies include “12 Angry Men,” “Poltergeist,” “Raging Bull” and “Moonstruck,” along with Rocky, James Bond and Pink Panther movies. Its TV shows include “Fargo,” “The Handmaid’s Tale” and “Vikings.”

The MGM purchase would be the second-largest deal in Amazon history, after its $13.7 billion acquisition of Whole Foods in 2017. It would essentially turn a company forged during the silent movie era into a streaming giant. The news release said the completion of the acquisition is subject to regulatory approvals.

MGM was last valued at $5.5 billion, including debt, in December 2020. Since then, its price has soared, reaching $105 per share in May. After the merger talks were reported, its per-share price rose to $150 on Monday (May 24).

The film-streaming industry is increasingly competitive. Longtime industry leader Netflix is beginning to really feel the pressure. Once a scrappy upstart, Netflix has transformed into an industry-leading giant with 208 million subscribers worldwide. Meanwhile, Disney, HBO and Viacom are all out to gain more customers. All three services grew more quickly in the first three months of this year than Netflix