Online retailer amazon.com has announced it will acquire film studio MGM for $6.5 billion, excluding MGM’s debt. MGM’s deal to be acquired by amazon.com, which is to be completed in the third quarter of 2017 – will see the company become the fourth studio in amazon’s film and television studio business, following its acquisition of the indie film marketplace amazon.direct and video streaming service amazon.TV.

Amazon has become the latest online retailer to join the entertainment industry’s drive for new streaming content, in a move that could help it grow its bottom line. The e-commerce giant has agreed to pay $2.5 billion (C$3.11 billion) for a 75 per cent stake in Hollywood studio MGM. The acquisition also includes a $700 million (C$877 million) loan, which will be used by MGM to fund the production of new content.

Amazon.com on Monday said it planned to buy movie studio MGM for $6.8 billion, including $575 million in debt, in a transaction that would give the online retailer greater control over the distribution of films released by its subsidiary, IMDb.com.

Amazon.com Inc.

AMZN 0.78%.

announced that it had reached an agreement to acquire Hollywood studio MGM Holdings. The deal, which the e-commerce giant is betting on, could boost its Prime Video streaming platform and allow it to compete with industry heavyweights like

Netflix Inc.

и

Walt Disney Co.

The acquisition price, announced Wednesday morning, is $6.5 billion, according to people familiar with the matter. Including the debt, Amazon says the deal is worth $8.45 billion. This is the second largest acquisition in the company’s history, following its purchase of Whole Foods for $13.7 billion in 2017.

At MGM, Amazon will have access to a library of more than 4,000 films, including iconic franchises like James Bond and Rocky, as well as classics like Silence of the Lambs, Raging Bull and 12 Angry Men. The television catalog includes such acclaimed series as The Handmaid’s Tale, Fargo and Vikings.

Amazon’s deal with MGM is the latest in a series of mergers that are shaking up the entertainment industry as media and technology companies vie for dominance in the streaming era.

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At the beginning of the month,

AT&T Inc.

announced its intention to demerge its WarnerMedia assets and merge with WarnerMedia.

Discovery Inc.

In recent years, Walt Disney has acquired much of the entertainment division of 21st Century Fox and Viacom Inc. has merged with CBS Corp. – all as part of an effort to bundle content and create direct-to-consumer streaming services.

Media executives have been talking for years about the possibility of merging with companies like Amazon and…

Apple Inc,

but the tech giants have avoided the big deals by building their own streaming platforms.

Things are changing now. Traditional studios are putting together more content for their own streaming services, like NBCUniversal’s Peacock and WarnerMedia’s HBO Max, rather than licensing to companies like Amazon and Netflix. Ownership of MGM will help Amazon better control its destiny in the streaming war.

Amazon wants to not only offer old movies and TV shows to its customers, but also use that content for new franchises.

The real financial value of this deal is the treasure trove of [intellectual property] in the deep catalog that we plan to recast and develop with the talented team at MGM, he said.

Mike Hopkins,

Senior Vice President of Prime Video and Amazon Studios.

The deal gives Amazon the Rocky franchise, among other things.

Photo:

MGM/Everett Collection

Although Amazon has deeper pockets than other streaming players, its Prime Video service has not seen as much creative success as Netflix and newcomer Disney+. She has directed several critically acclaimed films and television series, including Transparent, Manchester by the Sea and most recently One Night in Miami.

Prime Video is available as a bonus to more than 150 million subscribers to Amazon’s Prime shopping service.

Amazon and MGM have been in talks for nearly a year. The two companies first discussed the sale in January, but talks have since stalled, according to a person familiar with the matter. Amazon and MGM have met again in recent weeks, and the talks have moved forward quickly.

In addition to MGM, Amazon also acquired

Sony Group Corp.

Sony Pictures Entertainment for the acquisition, but it was rejected, said a person familiar with the matter.

Entertainment isn’t the only content Amazon spends a lot of money on. In March, the company struck a deal with the National Football League for the exclusive rights to Thursday Night Football for $1.2 billion per season for 11 years, according to people who were aware of the deal.

-Kara Lombardo contributed to this article.

E-mail Joe Flint at joe.flint@wsj.com and Dave Sebastian at dave.sebastian@wsj.com.

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