Online giant Amazon buys out all of Lovefilm
Online retail giant Amazon unveiled a deal giving it full control of film and games subscription business Lovefilm.
Amazon currently owns 42% of Lovefilm, which has 1.2 million members in the UK, but agreed to buy the rest of the company from its other shareholders, which include four venture capital firms and staff.
Lovefilm, which sends its members DVDs and games through the post or streams movies or TV shows to their computers or TVs, will continue to operate under its own brand. No value has been placed on the takeover but reports have suggested the deal valued Lovefilm at around £200m.
Amazon plans to grow the rental business with the help of its customer base and its movie website IMDb, said a source close to the deal.
He said: "If you take the world's biggest online retailer with a huge customer base and put it with one of the world's largest film clubs and the world's largest film website, that's quite a mouth-watering mix.
"Lovefilm is growing fast but Amazon sees further opportunity to grow it faster and they have some exciting plans for it," the source added.
Amazon sold its European DVD rental arm to Lovefilm in 2008, which is when it became a shareholder in the business.
Simon Calver, chief executive of Lovefilm International, said: "The deal is a winner for the members who love Lovefilm because of its value, choice, convenience and innovation in home entertainment.
"With Amazon's unequivocal support, we can significantly enhance our members' experience across Europe."
Lovefilm currently has about 1.6 million members across Europe.
The company was formed in 2004 as a film club sending DVDs to customers in the post.
It is now one of Europe's biggest pre-paid entertainment businesses, offering computer games as well as DVDs and streaming movies and TV shows to customers' computers or TVs via its Lovefilm Player.
Amazon, which was originally best known for selling books, last year diversified into selling food and drink.