“Sony Corp. said on Wednesday it was in exclusive negotiations with movie studio Metro-Goldwyn-Mayer Inc. on a possible takeover that could bolster its film library but put a dent in its finances,” Reuters reports. “Sony Vice Chairman Howard Stringer said at the electronics and entertainment conglomerate’s annual strategy meeting that it was ‘preparing an exclusive analysis’ of MGM and that it was ‘four or five days’ into a 20-day negotiating period.”
Reuters reports, “The deal would provide Sony with access to MGM’s 4,000-plus film library that includes the James Bond and Pink Panther titles to fulfill Chief Executive Nobuyuki Idei’s vision of an interconnected world linking content with Sony’s electronics. Sony is in the second year of a three-year, $3.1 billion restructuring plan aimed at overhauling profitability at its mainstay electronics business and fight off rivals Matsushita Electric Industrial and Sharp Corp.”
“Its revival plan hinges on the success of Idei’s vision, where Sony’s electronics are hooked seamlessly into a broadband network that can deliver content from the company’s movie and music studios,” Reuters reports. “So far, competitors, such as Apple Computer Inc. with its iPod digital music player, have been more successful in converting a combination of content and hardware into profits. Standard & Poor’s Ratings Services said on Tuesday that the possible acquisition of MGM by Sony could affect Sony’s credit quality.”
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