By Joe Flint and Dave Sebastian

Amazon.com Inc. said it has agreed to acquire Hollywood studio MGM Holdings, a deal the e-commerce giant is betting can jump-start its Prime Video streaming platform and position it to compete with industry heavyweights including Netflix Inc. and Walt Disney Co.

The purchase, which was unveiled Wednesday morning, has an equity value of $6.5 billion, people familiar with the matter said. Including debt, the value of the deal is $8.45 billion, Amazon said. It is the second-largest acquisition in the company's history behind its $13.7 billion purchase of Whole Foods in 2017.

In MGM, Amazon will get a library of over 4,000 films, including iconic franchises such as "James Bond" and "Rocky," and classics such as "The Silence of the Lambs," "Raging Bull" and "12 Angry Men." The TV catalog includes critically acclaimed shows such as "The Handmaid's Tale," "Fargo" and "Vikings."

"The acquisition's thesis here is really very simple," Amazon Chief Executive Jeff Bezos said during a call with shareholders later Wednesday. "MGM has a vast, deep catalog of much-beloved intellectual property, and with the talented people at MGM and the talented people at Amazon Studios, we can reimagine and develop that IP for the 21st century."

Amazon said in February that Mr. Bezos would be stepping down as CEO, a leadership change that leaves top lieutenant Andy Jassy to oversee MGM's integration into the company when he takes the reins as CEO on July 5. Mr. Bezos, who will become executive chairman, said Wednesday that Mr. Jassy's first day in the top role carries symbolic weight, coinciding with the date of Amazon's incorporation 27 years ago.

Amazon's deal for MGM is the latest in a series of mergers that are shaking the entertainment industry as media and tech companies fight for supremacy in the streaming age.

Earlier this month, AT&T Inc. said it would spin off its WarnerMedia assets and merge them with Discovery Inc. In recent years, Walt Disney bought most of the entertainment assets of 21st Century Fox, and Viacom Inc. recombined with CBS Corp., all part of efforts to amass content and build direct-to-consumer streaming services.

Media executives have buzzed for years about the possibility of mergers with companies such as Amazon and Apple Inc., but the tech giants avoided big-ticket deals as they built out their streaming platforms.

Now, the landscape is shifting. Traditional studios are keeping more content for their homegrown streaming services, such as NBCUniversal's Peacock and WarnerMedia's HBO Max, instead of licensing it to the likes of Amazon and Netflix. Owning MGM would help Amazon better control its destiny in the streaming wars.

Although Amazon has deeper pockets than any other players in the streaming game, its Prime Video service hasn't had the creative successes that Netflix and newcomer Disney+ have enjoyed. It made several critically acclaimed movies and TV shows including "Transparent, " "Manchester by the Sea" and, more recently, "One Night in Miami."

Prime Video is offered as a bonus for Amazon's more than 150 million subscribers to its Amazon Prime shopping service.

Amazon and MGM held on-again-off-again talks for much of this year. The two companies first discussed a sale in January, but then discussions cooled, a person familiar with the matter said. In recent weeks, Amazon and MGM began meeting again and negotiations advanced rapidly.

Besides MGM, Amazon also approached Sony Group Corp.'s Sony Pictures Entertainment about an acquisition but was rebuffed, a person familiar with the matter said.

Entertainment isn't the only content on which Amazon is spending heavily. In March it struck a deal with the National Football League for exclusive rights to Thursday Night Football at a price of $1.2 billion a season over 11 years, people with knowledge of that transaction said.

--Cara Lombardo contributed to this article.

Write to Joe Flint at joe.flint@wsj.com and Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

05-26-21 1611ET