Amazon Closes $8.5B Deal for MGM, FTC Watches in Wings

Amazon completed its $8.5 billion acquisition of MGM late last week. The companies finalized the deal immediately upon expiration of the Federal Trade Commission’s mid-March deadline to object, though the agency let it be known that it can challenge a deal any time it finds cause. Amazon in May announced intent to acquire MGM, which has a library of more than 4,000 films and some 17,000 TV episodes as well as ongoing production in both areas. In August, a group of four labor unions collectively urged the FTC to quash Amazon’s bid.

The deal closed after Amazon provided the FTC with more than three million documents these past eight months, then certified that it provided all information necessary for an antitrust assessment, reports The Wall Street Journal, noting “that step put the deal on a regulatory clock with the agency that has now expired, leaving the company free to move forward.”

The European Commission unconditionally approved the merger earlier in the week, noting that insofar as the EU is concerned, the deal “would not significantly reduce competition” and “overlaps between Amazon and MGM are limited.”

WSJ says the FTC position has been closely watched because chairwoman Lina Khan “has long been a vocal critic of Amazon.” In June, Amazon filed a request for Khan to recuse herself from antitrust-matters related to the company, though the agency has yet to respond. In February, the FTC and Department of Justice launched a joint review of merger guidelines, with Khan stating, “Global deal-making in 2021 soared to $5.8 trillion, the highest level ever recorded.”

“Beyond the FTC’s review of the merger, the agency is taking a broader look at Amazon’s operations,” WSJ writes. On March 9, members of the House Judiciary Committee asked the DOJ “to investigate Amazon and some of its executives for what lawmakers say is potentially criminal obstruction of Congress related to the committee’s investigation into Amazon’s clout,” according to Reuters.

MGM is being integrated into Amazon’s Prime Video and Studios unit, run by senior vice president Mike Hopkins, former chairman of Sony Pictures Television. MGM’s top brass — including Motion Picture Group chairman Michael De Luca, TV Group chairman Mark Burnett, and COO Chris Brearton — will report to Hopkins, according to Variety.

Deadline reports that Amazon does not intend to make MGM content exclusive to Prime Video, and plans to continue releasing films in theaters, “not as a one-size-fits-all proposition but something to be determine case by case.” MGM IP includes the lucrative James Bond film franchise.