[Asia Economy Reporter Yujin Cho] The Wall Street Journal (WSJ) reported that the world's largest e-commerce company Amazon is close to finalizing a deal to acquire Hollywood film production company MGM.
On the 24th (local time), WSJ cited anonymous sources saying that the acquisition agreement between Amazon and MGM could be announced as early as this week.
The acquisition amount is $9 billion (approximately 10.1385 trillion KRW), making this deal the second largest merger and acquisition (M&A) since Amazon purchased the largest U.S. organic food company Whole Foods for $13.7 billion in 2017.
Amazon first entered the media content business in 2010 by establishing the drama production company Amazon Studios and has since expanded its media content business by launching the online video service (OTT) 'Prime Video.'
U.S. CNBC reported that Amazon, which has formed a three-way competition with Netflix and Disney, was interested in acquiring more TV and movie content, and MGM's rich content was seen as suitable for strengthening the Prime service.
Founded in 1924, MGM is a major Hollywood production company that owns the rights to globally hit films such as the 007 series, Rocky, and Mad Max.
In addition to films, MGM operates Epix, which produces TV programs, and the value of MGM's content is estimated to reach $10 billion.
MGM filed for bankruptcy in 2010 and underwent restructuring, after which it has been seeking a buyer for several years.
Before Amazon, Apple and Netflix were also reported to have considered acquiring MGM, but negotiations did not proceed. At that time, Apple reportedly valued MGM at around $6 billion.
WSJ noted that this negotiation came a week after the announcement that U.S. telecommunications and media group AT&T's content subsidiary WarnerMedia would enter the OTT market by partnering with cable TV channel operator Discovery, and it is expected that consolidation in the U.S. media industry will continue.
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