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Amazon (AMZN) Receives Approval From EU for MGM Acquisition
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Amazon (AMZN - Free Report) finally received unconditional approval from the European Union (EU) for its proposed acquisition of Metro-Goldwyn-Mayer (‘MGM’) movie company for $8.45 billion. Notably, the deal was announced in second-quarter 2021.
The European Union’s antitrust regulator believes that the buyout will not create any competition issue in the European Economic Area.
More precisely, it will not disturb the competitive environment much in the markets for the production and supply of audiovisual content, the retail supply of audiovisual services, the production and licensing of distribution rights to third-party distributors of films for theatrical release, and the wholesale supply of TV channels.
We believe that the MGM acquisition would strengthen the offerings of Prime Video, which, in turn, will aid Amazon to bolster its footprint in the booming video streaming market. Per a report from Fortune Business Insights, the market is expected to witness a CAGR of 12.1% between 2021 and 2028.
Amazon with MGM intends to develop an interesting and exclusive catalog of movies and other content for Prime Video users.
The acquisition will bring MGM’s catalog of 4,000 films and 17,000 TV shows to Prime Video, which includes 12 Angry Men, Basic Instinct, Legally Blonde, Moonstruck, Fargo, Vikings, The Magnificent Seven, Shark Tank, Survivor, The Real Housewives, The Pink Panther, and the James Bond series.
Hence, the underlined deal, which will mark Amazon’s second-largest buyout after the Whole Foods acquisition, will help it boost the viewership on Prime Video as well as attract subscribers for its Prime Program.
Competitive Scenario
MGM acquisition is expected to provide Amazon a competitive advantage in the streaming market against players like Netflix (NFLX - Free Report) , Disney (DIS - Free Report) and Alphabet (GOOGL - Free Report) , which are also making concerted efforts to strengthen their presence in this market.
Notably, Netflix, the dominant market player, continues to make heavy investments in producing and distributing localized, foreign-language content to offer a diversified content portfolio.
Its recent acquisition of global rights of documentary Descendant remains a major positive.
Its Roald Dahl Story Company buyout, which has added some world-famous characters to Netflix’s portfolio, is also noteworthy.
Then again, Disney is benefiting from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering.
It has recently been revealed that it is creating a new hub for international content creation to boost the expanding pipeline of local and regional content for its streaming services. The extension plan would support the worldwide expansion of the company’s direct-to-consumer (DTC) business.
Meanwhile, Alphabet’s YouTube is gaining from the solid momentum across its huge viewer base. Further, YouTube’s popularity, expanding user base and growing portfolio of original contents remain noteworthy.
Nevertheless, Amazon’s aggressive strategies, acquisitions and strengthening content portfolio, along with shopping benefits and fast delivery services offered by Prime, will continue to bolster its market position.
Image: Bigstock
Amazon (AMZN) Receives Approval From EU for MGM Acquisition
Amazon (AMZN - Free Report) finally received unconditional approval from the European Union (EU) for its proposed acquisition of Metro-Goldwyn-Mayer (‘MGM’) movie company for $8.45 billion. Notably, the deal was announced in second-quarter 2021.
The European Union’s antitrust regulator believes that the buyout will not create any competition issue in the European Economic Area.
More precisely, it will not disturb the competitive environment much in the markets for the production and supply of audiovisual content, the retail supply of audiovisual services, the production and licensing of distribution rights to third-party distributors of films for theatrical release, and the wholesale supply of TV channels.
We believe that the MGM acquisition would strengthen the offerings of Prime Video, which, in turn, will aid Amazon to bolster its footprint in the booming video streaming market. Per a report from Fortune Business Insights, the market is expected to witness a CAGR of 12.1% between 2021 and 2028.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
More Into MGM Prospects
Amazon with MGM intends to develop an interesting and exclusive catalog of movies and other content for Prime Video users.
The acquisition will bring MGM’s catalog of 4,000 films and 17,000 TV shows to Prime Video, which includes 12 Angry Men, Basic Instinct, Legally Blonde, Moonstruck, Fargo, Vikings, The Magnificent Seven, Shark Tank, Survivor, The Real Housewives, The Pink Panther, and the James Bond series.
Hence, the underlined deal, which will mark Amazon’s second-largest buyout after the Whole Foods acquisition, will help it boost the viewership on Prime Video as well as attract subscribers for its Prime Program.
Competitive Scenario
MGM acquisition is expected to provide Amazon a competitive advantage in the streaming market against players like Netflix (NFLX - Free Report) , Disney (DIS - Free Report) and Alphabet (GOOGL - Free Report) , which are also making concerted efforts to strengthen their presence in this market.
Notably, Netflix, the dominant market player, continues to make heavy investments in producing and distributing localized, foreign-language content to offer a diversified content portfolio.
Its recent acquisition of global rights of documentary Descendant remains a major positive.
Its Roald Dahl Story Company buyout, which has added some world-famous characters to Netflix’s portfolio, is also noteworthy.
Then again, Disney is benefiting from the growing popularity of Disney+, owing to a strong content portfolio and a cheaper bundle offering.
It has recently been revealed that it is creating a new hub for international content creation to boost the expanding pipeline of local and regional content for its streaming services. The extension plan would support the worldwide expansion of the company’s direct-to-consumer (DTC) business.
Meanwhile, Alphabet’s YouTube is gaining from the solid momentum across its huge viewer base. Further, YouTube’s popularity, expanding user base and growing portfolio of original contents remain noteworthy.
Nevertheless, Amazon’s aggressive strategies, acquisitions and strengthening content portfolio, along with shopping benefits and fast delivery services offered by Prime, will continue to bolster its market position.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.