Amazon Inc. (NASDAQ: AMZN) wants to acquire MGM film studio to further expand its footprint in online streaming, said The Information on Monday. The two companies are currently in talks, and the agreement is not yet finalised. The Information clarified that a prospect of “no-deal” remains on the table.
MGM is known for popular titles like the James Bond franchise
MGM, which owns the American premium cable and satellite television network, is widely known as the studio behind popular titles like the James Bond and Terminator franchises. TV shows, including Vikings, Fargo, and Shark Tank, also stand under the same umbrella.
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MGM is currently under the ownership of a group of private equity funds after being pushed into bankruptcy almost a decade ago. MGM made $33 million (£23.23 million) in profit and $1.5 billion in revenues last year. Amazon refrained from commenting on the report in line with its policy to not comment on speculation or rumours. Such a deal, however, is expected to cost Amazon up to $10 billion.
In separate news from the United States, Warren Buffet’s Berkshire Hathaway said on Monday it took a $943 million stake in Aon (insurance company) and slashed its stake in Chevron and Wells Fargo.
MGM has been looking for a potential buyer since December 2020
In an earlier report by Reuters in December, the movie studio was said to be in search of a potential buyer. At the time, MGM was reported tapping investment banks LionTree LLC and Morgan Stanley. Later, Apple Inc. was also rumoured to be interested in buying MGM movie studio.
The news comes a day after AT&T said it would merge Warner Media with Discovery – a deal that, once approved by regulators, will create one of the largest Hollywood studios. Amazon spent $11 billion last year on TV and film content (creating, acquiring, and licensing) versus $7.8 billion in 2019.
Amazon opened at $3,292 per share in the stock market on Tuesday and climbed to $3,310 per share in the next hour. In comparison, the American multinational technology giant had started the year 2021 at a per-share price of $3,186. Amazon performed largely upbeat in the stock market last year with an annual gain of close to 75%. At the time of writing, it is valued at $1.66 trillion and has a price to earnings ratio of 62.57.