Famous for movies such as Hunger Games and Twilight, Lions Gate Entertainment Corp is preparing to be sold to a popular tech or media company. Although not releasing the name of the company, Vice Chairman of Lions Gate, Michael Burns, hinted on possible purchasers such as Comcast Corporation, Amazon, CBS Corporation or Verizon Communications.
With several high profile acquisitions involving companies such as AT&T taking over Time Warner for approximately US$85.4 billion and Walt Disney Company buying 21st Century Fox for US$66 billion, indicates several reasons other large players in the media industry may want to expand business by acquiring smaller successful businesses.
Furthermore, the expansion of some companies pressures or intimidates smaller video businesses into mergers and acquisitions. But would it be better to build to expand or just buy? Based on how far ahead companies such as Walt Disney and AT&T are in the media industry and their presence on the market, it would be wise for other companies to buy.
Most analysts’ bet is on Amazon Studios acquiring Lions Gate. Reason being, the two have had a close relationship from day one. Amazon Studio’s movies ‘The Big Sick’ and ‘Manchester by the Sea’ were produced by Lions Gate while Lions Gate’s computing services are provided by Amazon Web Services. Lions Gate is worth US$10 billion including all its debt with a US$7 billion market cap.
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