Amazon Agrees to Buy MGM for8845,000

It's official: Amazon is set to acquire MGM for $8.45 billion, including debt. That's a little less than the rumors were suggesting, but considerably more than the price at which the studio has been valued recently (The Wall Street Journal put it at around $5.5B in December).

The sale, which is subject to regulatory approval, will be Amazon's second-biggest acquisition to date (after Whole Foods, $13.7B) and its biggest in the media sector. It will also mark the first time a tech giant has bought a Hollywood studio. MGM is currently controlled by U.S. hedge fund Anchorage Capital and other financial investors.

“The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM's talented team,” said Mike Hopkins, svp of Prime Video and Amazon Studios. That trove includes franchises like James Bond and Robocop, the Pink Panther shorts, and Don Bluth's The Secret of NIMH (image at top) and his All Dogs Go to Heaven franchise.

Apple and Comcast (owner of Universal) had also shown interest in buying the studio, according to people familiar with the talks.

Amazon's growing media empire includes streaming service Prime Video, which is behind only Netflix in U.S. market share, and the studio Amazon Studios. Last year, the company spent $11B on Prime content - up 40% from 2019. In a sign that it is stepping up its commitment to this area, Amazon recently tapped Jeff Blackburn to oversee a newly consolidated global media and entertainment group.

In another major media deal, AT&T announced last week that it will spin off Warnermedia, which will then merge with Discovery to form a company worth more than $130B.