Metro-Goldwyn-Mayer Merger

1048 Words5 Pages
Sony-Metro Goldwyn Mayer Merger Rayzhaun Jones Mississippi Valley State University Strategic Management Dr. Jimmie S. Warren Abstract This paper will discuss Sony and MGM (Metro-Goldwyn Mayer), and how the merger acquisition took place. A great deal of companies, whether diminutive or immense, merge to become one company. Mergers and acquisitions (M&A) refers to the aspect of corporate strategy, finance, and management, which deals with the buying, selling and also the combining of many different companies that can help a growing company in an industry grow without having to create other business entities. Sony-Metro Goldwyn Mayer Merger For a long times, there were talks between Sony Pictures Entertainment and Metro-Goldwyn-Mayer Inc. for…show more content…
In 1924, Marcus Loew bought Metro pictures (founded in 1916) and Goldwyn Pictures (founded in 1917) to provide a supply of films for his theater chain, Loews Inc. However, these purchases created a need for someone to oversee the Hollywood operations. Loew addressed this by purchasing Mayer Pictures on April 16, 1924. Because of his success, Louis B. Mayer was made a vice-president of Loews and the head of studio operations in…show more content…
Sony and MGM merger acquisition too place on April 8, 2005. The acquisition was not carried by Sony alone. It was a joint acquisition of Comcast, Sony Corporation of America with Texas Pacific Group. The Texas Pacific Group is now referred to as TPG Capital. Providence Equity Partners was also a partner in the acquisition. It was believed that this merger would result in the generation of a business with billions in sales and shares. In addition to this, the merger would provide Sony with an extensive film library owned by MGM. It would help Sony in the entertainment hardware business. As a result of this deal, Sony could revitalize its efforts in the direction of technological developments in the entertainment business. In order to arrange the financial requirements for the deal, Sony took the help of its financial partners, such as the Texas Pacific Group, Providence Capital Inc. and others to understand the nature of the deal. In fact, Allen & Co., Blackstone Group and Credit Suisse First Boston were given the responsibility of designing this merger (Wall Street Skeptical of Sony as Lion tamer, 2008). After announcing the merger deal, the stock prices of MGM fell down. One the other hand, the stock prices of the acquiring company, Sony, experienced an increase in its stock

More about Metro-Goldwyn-Mayer Merger

Open Document