Amazon Announces Acquisition of MGM for $8.5 Billion
Amazon announced that it acquired Metro-Goldwyn-Mayer, an American media company, for $8.5 billion following regulators refused to challenge the deal. The recent development is Amazon's biggest takeover in five years.
The acquisition is the latest deal struck by a technology giant amid criticism that companies have been able to take control of smaller firms with no pushback from business regulators.
The EU regulators gave a green signal to the deal after finding that it has no competition problems. The Federal Trade Commission (FTC) in the US has the authority to stop such a deal in the future if a majority of commissioners vote to file a lawsuit. But the commission is divided between two Republicans and two democrats.
In May last year, Amazon agreed to purchase MGM to bolster its streaming content. MGM will give Amazon a back catalogue of 25,000 hours.
The takeover is Amazon's biggest acquisition since it agreed to buy Whole Foods in 2017 for $13.7 billion. The company spent around $ 24 million on video and music for its streaming services in 2020 and 2021 alone.
Amazon has in the past acquired smaller firms due to threats they pose to its business. For example, it bought footwear seller Zappos or Diapers.com parent Quidsi. It has also taken over new business lines, such as the game platform Twitch or Kiva, which makes warehouse robots.