Amazon and MGM have announced that they have entered into a definitive merger agreement under which Amazon will acquire MGM for a purchase price of $8.45 billion.
“MGM has nearly a century of filmmaking history and complements the work of Amazon Studios, which has primarily focused on producing TV show programming. Amazon will help preserve MGM’s heritage and catalog 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,” a company statement said.
“It has been an honor 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,” said Kevin Ulrich, Chairman of the Board of Directors of MGM.
“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,” he added.
Completion of this transaction is subject to regulatory approvals and other customary closing conditions.
The acquisition is Amazon’s second-biggest after Whole Foods Market, which it bought for $13.7 billion in 2017, said a Reuters report. At almost $9 billion, the lofty price is about 37 times MGM’s 2021 estimated EBITDA – or almost triple the enterprise value-to-EBITDA multiple that Discovery’s deal implied for AT&T’s content assets, according to Reuters Breakingviews.