Amazon on Tuesday gained unconditional EU antitrust approval for its proposed $8.5 billion acquisition of U.S. movie studio MGM to help it compete with streaming rivals Netflix and Disney+. The European Commission said the deal would not pose competition concerns in Europe, confirming a Reuters story on March 9. The $8.5bn acquisition is now waiting for approval by the US Federal Trade Commission, representing Amazon’s second biggest-ever deal. The U.S. Federal Trade Commission has a mid-March deadline to decide on the deal.
The EU competition enforcer said it had looked into overlaps between the world’s largest online retailer and MGM in audio-visual content and found that the combined market shares are low and that they have strong rivals. The unconditional approval was given after the EC said the merger “would not significantly reduce competition” in the production and supply of content, the supply of TV channels, nor the production and licensing of distribution rights to third-party distributors of films for theatrical release. “The addition of MGM’s content into Amazon’s Prime Video offer would not have a significant impact on Amazon’s position as a provider of marketplace services,” the Commission said. “The Commission found that the overlaps between Amazon and MGM are limited. 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,” it added.
The next hurdle for Amazon is to gain approval in the US via the FTC, which has until mid-March to come to its verdict. It is believed that the deal will pass through the FTC, with Amazon ‘substantially complying’ with the FTC’s requests for information about the deal. The FTC currently has an anti-trust probe into Amazon currently ongoing as part of investigations into the four largest tech platforms in the US – Amazon, Meta, Google, and Apple.
Analysts said the deal would boost Amazon’s video streaming service and attract people to subscribe to Amazon Prime. The e-commerce giant with its massive market cap of $1.4 trillion is buying the century-old studio from investors led by Anchorage Capital, whose founder Kevin Ulrich is chairman of MGM. The deal is the first in what had been a long-anticipated marriage of deep-pocketed big tech players and Hollywood. Upon completion, MGM would add more than 4,000 titles and 17,000 TV shows to the content that Amazon could offer to Prime Video users, including the Academy Award-nominated "Licorice Pizza" and all "James Bond" movies, one of the most lucrative franchises in film history, having earned nearly $7 billion at the box office globally.