Big deal. Amazon acquires MGM Studios for $8.45 billion

Amazon and MGM on Wednesday announced that they have entered into a definitive merger agreement under which Amazon will acquire MGM for a purchase price of $8.45 billion.

The deal is the latest in the media industry that is aimed at boosting streaming services to compete against Netflix and Disney+.

Amazon said they plan to “reimagine and develop together with MGM's talented team”, stories from the vast catalogue of the studio which has almost a century-old history in film making.

Metro Goldwyn Mayer, better known as MGM, has over 4,000 beloved film titles, including "12 Angry Men", "Basic Instinct", "Creed", "James Bond", "Legally Blonde", "Moonstruck", "Raging Bull", "Rocky", "Silence of the Lambs", "Thelma & Louise", "Tomb Raider", "The Magnificent Seven" and "The Pink Panther", in its vast library.

It also has 17,000 TV shows -- including "Fargo", "The Handmaid's Tale", and "Vikings" -- that have collectively won more than 180 Academy Awards and 100 Emmys, said Mike Hopkins, Senior Vice President of Prime Video and Amazon Studios.

"The real financial value behind this deal is the treasure trove of IP in the deep catalogue that we plan to re-imagine and develop together with MGM's talented team. It's very exciting and provides so many opportunities for high-quality storytelling," Hopkins said in a statement.

Regulatory approvals

Kevin Ulrich, Chairman of the Board of Directors of MGM added, "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." Completion of this transaction is subject to regulatory approvals and other customary closing conditions, the release said.

Amazon doesn't say how many people watch its Prime Video service. But more than 200 million have access to it because they're signed up for its Prime membership, which gives them faster shipping and other perks. Besides Prime Video, Amazon also has a free streaming service called IMDb TV, where Amazon makes money by playing ads during movies and shows.