Amazon nears deal to buy MGM Studios for nearly $9 billion as streaming competition heats up

Amazon is nearing a deal to acquire Hollywood studio MGM Holdings in a deal that valued the co-owner of the James Bond franchise and other film and TV series, for between $8.5 billion and $9 billion, according to several published reports.

The deal could be announced this week, according to a Monday report from The Wall Street Journal. But people familiar with the negotiations said the deal is expected to be announced as soon as Tuesday. The sources asked not to be named because the talks are private and still ongoing.

The announcement of the deal follows reports of mergers of WarnerMedia and  Discovery.  Many industry analysts see MGM as a natural fit for Amazon because of its plethora of content. CNBC Alex Sherman wrote that Amazon is going after MGM Studios because the e-commerce giant is interested in acquiring more TV and film content for its Prime Video service so as to take on Netflix, Disney, and other streaming video services.

“This is a sign of just how competitive this space is,” Evercore ISI Senior Managing Director Mark Mahaney told Yahoo Finance in a recent interview.

“The cost of participation in this club is going to rise…and the table stakes are extremely high,” he continued — echoing that “there is going to be more consolidation” as more platforms come to market.

“You have to be willing to spend probably $10 billion a year in order to be a global streaming company, and I think very few companies can afford to do that beyond the big five players,” he added.

Founded in 1924 by Louis B. Mayer and Marcus Loew, MGM is involved primarily in the production and distribution of feature films and television programs. MGM was later acquired on September 23, 2004, by a partnership consisting of Sony Corporation of America, Comcast, Texas Pacific Group (now TPG Capital, L.P.), Providence Equity Partners, and other investors.

The company owns a number of popular reality TV shows, including “Shark Tank,” “Survivor,” “The Real Housewives” series, and “The Voice.” MGM also owns Epix, a premium pay-TV service valued at about $1.3 billion as of 2017.