Amazon, which is expanding into the television business with the launch of its streaming service, is moving into the entertainment space with a $5 billion deal to acquire movie studio Lionsgate Entertainment.
The deal, which also includes Amazon Studios and its own original content arm, Prime Video, will create a $2.7 billion company, according to a person familiar with the transaction.
It is one of several acquisitions in recent months that have boosted Amazon to the top of the movie rental industry.
Amazon Studios is one such acquisition.
Amazon, based in Seattle, will retain ownership of its film studio and other creative assets, including television and video.
Lionsgate will be in charge of television programming, including shows like “The Muppets,” and will be responsible for developing and producing new shows.
Lionsgate Entertainment will become a subsidiary of Amazon Studios, which already owns a majority of the company.
Amazon will pay $8 billion for the acquisition, with $2 billion going to the company in cash, a person with knowledge of the transaction said.
The transaction, which was first reported by the Wall Street Journal, is expected to close in the third quarter.
It follows a $7 billion purchase by Netflix last year.
The acquisition comes as Amazon Studios has struggled to maintain momentum with “The Lego Movie,” a box office flop that was delayed in May and was widely criticized by critics.
The movie, starring Tom Hanks, has grossed less than $1 million, while Lionsgate has not yet released a theatrical trailer.
Amazon Studios has also been struggling to capitalize on its original programming, which has struggled, particularly with its new streaming service.
The company has said it is making the content available for free to subscribers on Prime Video as part of a broader effort to diversify its product offerings.