A group headed by Sony Corp. of America has agreed to buy Metro-Goldwyn-Mayer (MGM) for about $2.85 billion in cash.
The deal allows Sony access to MGM’s coveted and lucrative library of films for the booming DVD market and to move forward on its vision of creating synergies between Sony’s consumer electronics products and music, movies and games, the companies said.
In the deal, Sony is joined by Providence Equity Partners Inc., Texas Pacific Group and DLJ Merchant Banking Partners. Sony also assumes about $2 billion in debt.
Sony and MGM combined will account for about 7,600 film titles—3,500 from Sony and 4,100 from MGM, creating the world’s largest film library.
Sony and its equity partners have also struck an agreement with U.S. cable TV operator Comcast Corp. for Comcast to offer Sony and MGM movies over its video-on-demand systems and on new cable channels formed with the Sony group. Comcast is considering becoming a major equity partner in the MGM deal, the companies said.
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