MGM’s stock — which had risen from $105 in mid May to $140 on Monday morning — hit $150 later in the day after The Wall Street Journal reported the studio is nearing a deal to be acquired for nearly $9 billion by Amazon.
Barring a last-minute glitch in the talks, the deal could be announced as early as this week, knowledgeable sources told The Journal.
The deal is being driven by the race for all-important content among Amazon, Netflix and other major players in the streaming wars.
If finalized, it would be Amazon’s second-largest acquisition, after its $13.7 billion buy of Whole Foods in 2017.
The talks were first revealed last week, by The Information.
MGM fired then-CEO Gary Barber in 2018 after he held preliminary talks with Apple Inc. on a deal that valued MGM at $6 billion plus. But the studio has been up for sale since 2020, and hedge funds that converted their debt to equity after MGM emerged from bankruptcy in 2010 have been eager to recoup their investments with a sale, notes WSJ.
An MGM acquisition will provide critics of Amazon’s reach and power with more fodder.
“This proposed merger is yet another example of Big Tech’s commitment to total dominance in every sector of our economy,” said Rep. Ken Buck of Colorado, ranking Republican on the House Antitrust Subcommittee that produced a report that said Amazon had a monopoly over its marketplace sellers, in a statement. “If Congress does not act soon, there won’t be a market Big Tech doesn’t control.”