Amazon.com agreed to buy MGM Studios for $8.45 billion, in a deal that emphasizes the tech giant’s willingness to spend deeply to remain competitive in the crowded streaming market.
The takeover is Amazon’s biggest acquisition since it agreed to buy Whole Foods in 2017 for $13.7 billion. It also follows investments of about $11 billion on content for its streaming video and music services over the last year.
Amazon says it hopes to leverage MGM’s storied filmmaking history and wide-ranging catalog of 4,000 films and 17,000 TV shows to help bolster Amazon Studios, its film and TV division.
“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, senior vice president of Prime Video and Amazon Studios. “It’s very exciting and provides so many opportunities for high-quality storytelling.”
In a statement, MGM Chairman Kevin Ulrich said: “The opportunity to align MGM’s storied history with Amazon is an inspiring combination.”
The rapid growth of streaming services, including newer arrivals such as HBO Max and Disney+, has put pressure on Amazon to acquire more programming. MGM’s vast backlog provides an abundance of streaming material, not to mention an opportunity to mine the iconic James Bond movies.