Online film rental company Lovefilm is to acquire Amazon’s UK and German DVD rental business.
Completion of the deal is subject to regulatory approval in the UK and Germany. If successful, the Lovefilm subscriber base will total more than 900,000 customers, predominantly in the UK and Germany, but also in the Nordic countries.
As part of the deal, Amazon Europe will also make a cash investment in Lovefilm, making it the company’s largest shareholder. The two companies will enter into a multi-year marketing agreement in which Amazon Europe will promote Lovefilm’s services on its sites for UK and German customers.
Amazon European retail vice-president Greg Greeley said: “As one of Europe’s largest online DVD rental businesses, Lovefilm is well established to serve customers’ increasing demand for entertainment. Our investment will enable Lovefilm to grow the business further and we are excited to be part of its future.”
Lovefilm chief executive Simon Calver said the company would use Amazon's investment to increase subscriber numbers and to invest more in customer services. “We don't comment on future expansion plans into new countries, but we aim to continue the rate of growth that we've seen over the past few years,” he said.
Last year, Lovefilm’s annual sales rocketed 368 per cent to£27.6 million. In addition to the UK and Germany, Lovefilm operates in Sweden, Norway and Denmark.