Amazon’s $8.5bn MGM deal inches closer with EU antitrust approval

BY Richard Summerfield

The European Union’s (EU’s) antitrust regulator unconditionally approved Amazon’s proposed $8.5bn acquisition of US movie studio MGM, in part because “MGM’s content cannot be considered as must-have”. The deal is still pending approval by the US Federal Trade Commission (FTC), which has a mid-March deadline to decide on the deal. If the FTC does not file a legal challenge before the deadline, Amazon can move forward with the acquisition.

The EU competition regulator, the European Commission (EC), said it had looked into overlaps between Amazon and MGM in audio-visual content and found that the combined market shares are low and that they have strong rivals. “The addition of MGM’s content into Amazon’s Prime Video offer would not have a significant impact on Amazon’s position as provider of marketplace services,” the Commission said in a statement.

“The parties are primarily active in different parts of the AV content value chain and where both parties are active, their combined market shares are low,” the EC added. It also found that MGM’s upstream activities as a producer and licensor of film and TV content “are limited compared to other market players’ activities”.

“We’re pleased with the Commission’s decision and, with MGM, look forward to providing more choice of quality entertainment for viewers,” said an Amazon spokesperson. Interestingly, the EC has previously filed charges against Amazon for its use of vendor data to compete with third-party sellers on its online retail platform.

The deal for MGM, which was founded in 1924, was announced in May 2021. It stands to bring Amazon a catalogue of more than 4000 movies, including James Bond, one of the most lucrative franchises in film history with nearly $7bn in global box office earnings, and 17,000 TV programmes. The EC said the “addition of MGM’s content into Amazon’s Prime Video offer would not have a significant impact on Amazon’s position as provider of marketplace services”.

The competition in the global streaming market is intensifying. Amazon Prime passed 200 million subscribers last year, and the company said 175 million of those paying members also streamed Prime Video content. Market leader Netflix has 222 million subscribers, while the soon to be combined Discovery+ and HBO Max will have around 96 million subscribers.

News: Amazon wins EU antitrust nod for $8.5 bln MGM deal

©2001-2024 Financier Worldwide Ltd. All rights reserved. Any statements expressed on this website are understood to be general opinions and should not be relied upon as legal, financial or any other form of professional advice. Opinions expressed do not necessarily represent the views of the authors’ current or previous employers, or clients. The publisher, authors and authors' firms are not responsible for any loss third parties may suffer in connection with information or materials presented on this website, or use of any such information or materials by any third parties.