Sony Corp Chief Financial Officer Katsumi Ihara said the company needs to buy Metro-Goldwyn-Mayer Inc to expand its own film unit, after reports that Time-Warner Inc made a bid for the owner of the "James Bond" movies.
"The deal is necessary for our pictures business to grow in the longer term," Ihara, 53, said in an interview from Sony's Tokyo headquarters.
Sony, Texas Pacific Group and Providence Equity Partners are negotiating to buy MGM for almost US$5 billion, the Wall Street Journal reported last week. Time Warner, the world's largest media company, offered as much as US$4.6 billion in cash for MGM, the paper said, citing people familiar with the offer.
Sony, whose Spider-Man 2 earned US$740 million at box offices worldwide, is seeking to expand the library at its movie business, which accounts for about a 10th of Sony's sales.
Standard & Poor's said in May that Sony's credit quality could be affected by the purchase's cost, delaying an earnings recovery.
The acquisition would add Los Angeles-based MGM's more than 4,000 films, including West Side Story and the Bond series, to Sony's properties.
Sony's US$3.4 billion purchase of Columbia Pictures in 1989 is the company's biggest acquisition, spokeswoman Mami Imada said.
Billionaire Kirk Kerkorian, who has a controling stake in MGM, earlier this month disputed reports saying the film studio may announce an agreement as early as this week.
Aided in part by lower marketing costs, Sony's movie business posted a US$37 million profit in the three months ended June 30.
MGM ranks 10th in domestic box-office sales this year among Hollywood studio owners, with US$175.3 million through July 25, box-office tracker Nielsen EDI said in July. Time Warner, owner of Warner Bros and New Line Cinema, ranks first with US$1.01 billion.
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