Shares of AMC Entertainment Holdings Inc (AMC) rose on Tuesday afternoon following a report that Amazon.com Inc (AMZN) is considering a buyout of the theater chain. According to Intersect, Amazon’s founder and former CEO, Jeff Bezos, has instructed his investment advisors to explore a potential acquisition of AMC. The report suggests that Amazon is looking into the possibility of using AMC’s theaters as “marketing weigh stations,” which would include promoting Prime movies and other Amazon services.
AMC CEO Adam Aron reportedly declined to comment on the matter, stating that the company does not reply to rumors and speculation. However, it is important to note that the story was sourced anonymously, citing “multiple senior sources familiar with the discussions.”
Benzinga has reached out to both AMC and Amazon for comment but has not received a response. The story is developing, and this article will be updated if either company responds.
The potential acquisition of AMC by Amazon would mark a significant move for the e-commerce giant, which has been expanding its presence in the entertainment industry in recent years. Amazon has been investing heavily in original content, producing movies and TV shows for its Prime Video streaming service. The company has also been expanding its brick-and-mortar presence, acquiring Whole Foods in 2017 and opening Amazon Go stores.
If the acquisition goes through, Amazon could use AMC’s theaters to promote its own content and services, reaching a wider audience and potentially boosting its customer base. It could also provide a new revenue stream for AMC, which has been struggling amid the COVID-19 pandemic. The pandemic has forced theaters to close for extended periods and led to a decline in movie attendance, causing AMC’s stock price to plummet.
However, the potential acquisition could face regulatory hurdles. The U.S. Department of Justice has been scrutinizing big tech companies for antitrust violations, and an acquisition of a major theater chain by Amazon could raise concerns about competition in the entertainment industry.
It is worth noting that Amazon is not the only company reportedly interested in acquiring AMC. In January, reports surfaced that private equity firm Apollo Global Management was considering a buyout of the theater chain. However, no deal has been announced as of yet.
In summary, AMC’s stock price has risen following reports that Amazon is considering a potential acquisition of the theater chain. If the acquisition goes through, it could provide a new revenue stream for AMC and give Amazon a platform to promote its own content and services. However, the potential acquisition could face regulatory hurdles, and it is not clear if a deal will be reached.