Amazon In Talks to Purchase AMC Theatres. Rumors of a potential merger between Amazon.com, Inc. and AMC Theatres caused AMC’s stock to soar this week. Due to the COVID-19 pandemic, AMC Theatres had been struggling with a plan to remain open once theaters reopen in the coming months.
With no reasonable way to pay off debts acquired during the theater closures it was looking as if AMC Theatres would not recover from the downturn and would either be forced to file for bankruptcy or close there doors forever. That is until Amazon took an interest in acquiring the company.
Analyst Eric Wold at B. Riley FBR shared one of the reasons Amazon may be interested in acquiring the popular theater chain is not only the cheap by comparison price tag, but also the Department of Justice’s announcement to revisit and either revise or terminate the Paramount Consent Decrees placed in 1948 that limited the ownership of theater chains by a film studio to prevent monopolization of the market.
“With Amazon not dependent on any other release windows beyond its own subscription service (other than to qualify for industry awards), we would view increased control over the theatrical window through the acquisition of a large exhibitor as providing Amazon both an incremental earnings stream from its own films and an attractive marketing vehicle to drive additional subscribers being exposed to the studio’s films—something that, we believe, other studios would be comfortable with them doing,” Wold wrote in a note to clients.
AMC Theatres has yet to comment on the rumored meetings between them and Amazon, but it seems likely that a buy out or merger could be on the way. Be sure to check back here at Chip and Co. for all things Entertainment!
Featured Photo Credit: Amazon/AMC Theatres