Shares in the largest movie theater chain in the world, AMC, which has been hard hit by the lockdown, have risen 30% following rumors of conversations with Amazon regarding a possible acquisition.
The financial health of AMC, which now has a debt of $4.9 billion, has long been in question, and several analysts claimed that bankruptcy was simply a matter of time, which would put Amazon in the position of a white knight coming to its rescue. AMC is currently valued at under $500 million, invites speculation compared to recent past deals such as the acquisition of Whole Foods, which was worth around $13.7 billion, in June 2017.
For the moment, it’s all speculation. But why would Amazon want to buy the world’s largest movie theater chain? In the first place, Amazon already produce a lot of content through Prime Video, so taking over outlets to show that content could make sense. Until a few months ago, US antitrust rules prevented studios from acquiring movie theater chains, so as to prevent a single player controlling the entire value chain, but in November 2019, the Justice Department announced that the rule, which had been in place since the 1940s, would be revised due to the increasing complexity and presence of new players in the industry, such as streaming companies.
It is important to note that content created by companies such as Amazon or…
