Amazon confirms $8.45bn MGM deal

Elisabeth Moss in MGM-produced drama The Handmaid’s Tale

US tech giant Amazon has confirmed its acquisition of US studio MGM for US$8.45bn.

The two companies have released a statement confirming a definitive merger agreement, with MGM’s century of filmmaking history complementing the work of Amazon Studios, which has focused primarily on producing series.

“Amazon will help preserve MGM’s heritage and catalogue of films, and provide customers with greater access to these existing works. Through this acquisition, Amazon would empower MGM to continue to do what they do best: great storytelling,” the statement said.

MGM’s vast library of films includes the James Bond franchise as well as 12 Angy Men, Basic Instinct, Creed, Tomb Raider, The Pink Panther and others. It is also behind drama series including Fargo, The Handmaid’s Tale and Vikings.

Mike Hopkins, senior VP of Prime Video and Amazon Studios, said: “The real financial value behind this deal is the treasure trove of IP in the deep catalogue that we plan to reimagine and develop together with MGM’s talented team. It’s very exciting and provides so many opportunities for high-quality storytelling.”

Kevin Ulrich, chairman of the board at MGM, added: “It has been an honour to have been a part of the incredible transformation of Metro Goldwyn Mayer. To get here took immensely talented people with a true belief in one vision. On behalf of the board, I would like to thank the MGM team who have helped us arrive at this historic day.

“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. The opportunity to align MGM’s storied history with Amazon is an inspiring combination.”

The news follows speculation towards the end of 2020 that MGM had hired two investment banks to explore a possible sale for around US$5.5bn, having been the subject of M&A speculation for many years.

Apple has previously been tipped as a potential buyer of the studio, as the various tech giants look to add to their libraries of IP with libraries of films and TV series to exploit via streaming.

Completion of this transaction is subject to regulatory approvals and other customary closing conditions.