Amazon announced on Thursday that it has completed its $8.5 billion acquisition of MGM, bringing together the legendary film studio with the e-commerce giant as it seeks to attract more customers through streaming video.
Amazon said in a statement that it would embrace all MGM workers and cooperate with the studio's management, implying that there would be no layoffs. It made the choice to close after the time for the US Federal Trade Commission to file a lawsuit against the deal passed.
MGM gave a plethora of content to entice users to Amazon's video streaming platform Prime, which cost $14.99 per month in the United States, according to the Seattle-based company, that announced the deal in May 2021.
Analysts predicted that the deal will enhance Amazon's video streaming service and encourage people to join Amazon Prime, which includes free shipping and encourages customers to spend more frequently.
MGM's employees will join Mike Hopkins, senior vice president of Prime Video and Amazon Studios, at Amazon, according to the company.
"We welcome MGM employees, creators, and talent to Prime Video and Amazon Studios, and we look forward to working together," he said in a statement.
MGM adds almost 4,000 film titles to Amazon Prime Video, including the Oscar-nominated "Licorice Pizza" and a great number of television episodes that might enable Amazon compete with streaming competitors Netflix and Disney+ (DIS.N).
MGM's "strong array of original pictures and television shows" was complimented by Hopkins.
Amazon has cleared regulatory hurdles nearly a year later. The transaction was authorized by the European Commission on Tuesday, with no strings attached. Similarly, Amazon told the FTC earlier this year that it had largely cooperated with demands for information regarding the deal.
The EU antitrust authority said it investigated overlaps in audio-visual content between Amazon and MGM and discovered that their combined numbers are modest and that they have strong competitors.
An FTC spokesperson declined to answer questions regarding the transaction, but said the agency might challenge a purchase after it's closed if it "violates the law."
The Federal Trade Commission is investigating the online retail giant as part of government antitrust probes of the four major tech companies, including Facebook and Google, that began under the Trump administration.
In mid-August 2021, the US Federal Trade Commission filed a fresh complaint against Facebook, detailing the allegations that the social media giant crushed or acquired rivals and requesting that a judge order Facebook to sell Instagram and WhatsApp once more.
In October 2000, the US Justice Department filed a lawsuit against Alphabet Inc's (GOOGL.O) Google, accusing the $1 trillion firm of improperly leveraging its market power to stifle competitors. The date for the trial has been scheduled for Sept. 12, 2023.
The FTC is likely to investigate Amazon's obvious conflict of interest with smaller sellers on its online marketplace, particularly claims that it exploited information from merchants to decide which products to add.
Amazon stock is selling for $3,144 per share as of today, March 18th, 2020, and this acquisition may add more value to Amazon as a whole. The share price increase is not evident now but it will be there when Amazon starts to report impressive returns.
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