The E.U. antitrust regulator is set to approve Amazon’s (AMZN) acquisition of MGM Studios unconditionally, according to a Reuters report citing sources familiar with the matter. AMZN shares jumped 2.4% to close at $2,785.58 on March 9.
The European Commission is expected to hand down its verdict on the deal on March 15. The U.S. Federal Trade Commission, which is also reviewing the deal, has a mid-March deadline to make its decision, according to the report.
$8.45 Billion Transaction
MGM Studios produces films and television programs. It has built a portfolio of more than 4,000 films, including blockbuster titles such as James Bond. Its portfolio also includes 17,000 television shows, including The Handmaid’s Tale and Fargo.
The MGM acquisition is expected to complement Amazon Studios, which primarily produces television shows. It is also expected to boost Amazon’s video streaming service amid increasing competition from Netflix (NFLX) and Walt Disney (DIS). Amazon offers video streaming as part of its Prime membership program, which fuels shopping on its e-commerce platform.
MGM also licenses its videogame content, meaning the deal could also boost Amazon’s gaming ambitions.
Amazon agreed to acquire MGM for $8.45 billion. At the time of announcing the deal, Amazon said that the closing of the transaction was subject to regulatory approvals.
Stock Rating
In February, Citigroup analyst Jason Bazinet reiterated a Buy rating on Amazon stock and raised the price target to $4,115 from $4,100, implying 47.73% upside potential.
Consensus among analysts is a Strong Buy based on 34 Buys. The average Amazon price target of $4,218.56 implies 51.44% upside potential to current levels.
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