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The deal, which is valued at $8.45 billion, gives Amazon an extensive library of film and TV shows that it can use to fill out its Prime Video content coffers. MGM has a catalog with more than 4,000 films and 17,000 TV shows, according to Mike Hopkins, who heads Prime Video and Amazon Studios.
"The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM's talented team. It's very exciting and provides so many opportunities for high-quality storytelling," he added.
The two companies said that the completion of the deal "is subject to regulatory approvals and other customary closing conditions."
MGM and 007
Although MGM's logo of a roaring lion has played in front of some of Hollywood's most beloved films, including "The Wizard of Oz," it doesn't have the deep franchise bench that other studios have.
So why would Amazon want MGM? Three words: Bond, James Bond.
The studio owns a piece of the spy franchise, one of Hollywood's most famous film series. The Bond brand, which Eon Productions also controls, is more than a box office success story racking up billions of dollars over the past 60 years. The films and their lead character also represent a lifestyle that branches out to all parts of the globe and pop culture. If Prime Video is the new home of James Bond, that's an alluring proposition for potential consumers.
Away from the suave British spy, MGM also houses franchises including "Rocky," "The Handmaid's Tale," "RoboCop," "Legally Blonde" and the Epix TV network.
A consolidating media industry
Amazon acquiring MGM may not be as earth-shaking as that Discovery and WarnerMedia deal, but it's still quite notable thanks to MGM's historical prestige and Amazon's reach and resources.
But the simplest reason Amazon wanted to buy MGM is that it can afford to.
Ultimately, the deal gives Amazon more content, a respected studio in Hollywood and a stylish super spy. That will only help it further compete in the ruthless world of streaming.