EU clears sale of MGM to Sony Group

31-Mar-2005 • Bond News

European regulators on Wednesday approved the $3 billion cash acquisition of film studio Metro-Goldwyn-Mayer Inc., clearing a final hurdle for investors led by Sony Corp. of America to close the MGM deal by mid-April - reports Reuters.

The European Commission did not place any conditions on the acquisition, the companies said in a statement. The deal already cleared U.S. regulators, and in December was approved by MGM shareholders, including principal owner billionaire Kirk Kerkorian.

When completed, MGM will be effectively controlled by the Los Angeles-based Sony Pictures Entertainment wing of Japanese electronics giant Sony Corp, but remain an independently run film and television studio.

Sony's partners included private equity firms Providence Equity Partners, Texas Pacific Group, DLJ Merchant Banking Partners and cable TV company Comcast Corp. The acquisition also included about $2 billion in assumed debt.

Industry watchers expect MGM's new president, Dan Taylor, to focus on managing cash flows from re-packaging movies in its 4,000-plus title library into new products like DVDs and launching cable TV outlets that are bolstered by the library.

The MGM library includes the lucrative James Bond film franchise, as well as the "Pink Panther" movies, a sequel of which MGM plans to release later this year.

Taylor has told Reuters in the past that MGM will continue to make movies and TV shows, but on a smaller scale. Those movies and programs will be distributed by Sony.

Because MGM will be aligned with Sony, it is no longer seen as an independently run studio by Hollywood insiders, thus ending a chapter in its long history that includes classic films such as "Gone with the Wind" and "The Wizard of Oz."

Thanks to `Kyvan` for the alert.