Amazon announced on Wednesday that it has agreed to buy MGM, the Hollywood studio behind the James Bond and Rocky franchises, for $8.45 billion. The deal is the second-largest acquisition in Amazon’s history, after its $13.7 billion purchase of Whole Foods in 2017.

The acquisition will give Amazon access to MGM’s library of more than 4,000 films and 17,000 TV shows, as well as its production capabilities and talent. Amazon said it plans to leverage MGM’s content to enhance its Prime Video streaming service, which competes with Netflix, Disney+, and others.

“The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios, in a statement.

MGM, which was founded in 1924, has been struggling with debt and ownership changes for years. The studio filed for bankruptcy in 2010 and emerged under the control of a group of hedge funds. In December 2020, MGM said it was exploring a sale, reportedly seeking a price of around $10 billion.

The deal is subject to regulatory approvals and other customary closing conditions. Amazon said it expects to close the transaction in the second half of 2021.

The deal is the latest in a wave of consolidation in the media and entertainment industry, as traditional players seek to compete with streaming giants. In May, AT&T announced that it would spin off its WarnerMedia unit and merge it with Discovery, creating a new company that will own HBO, CNN, Warner Bros., Discovery Channel, and more. In 2019, Disney completed its $71 billion acquisition of 21st Century Fox’s entertainment assets, while Viacom and CBS merged to form ViacomCBS.

Amazon, which is one of the world’s largest and most valuable companies, has been expanding its presence in various sectors, including e-commerce, cloud computing, artificial intelligence, health care, and space. The company reported $386 billion in revenue and $21 billion in profit in 2020, and has a market capitalization of over $1.6 trillion.

MGM is one of the oldest and most iconic studios in Hollywood, with a history of producing and distributing some of the most popular and acclaimed films and TV shows of all time. Some of its franchises include The Wizard of Oz, Gone with the Wind, The Pink Panther, The Hobbit, The Handmaid’s Tale, Fargo, and Survivor. The studio also owns a 50% stake in the Epix cable network.

Analysts said the deal is a strategic move for Amazon, which is looking to boost its content offerings and attract more subscribers to its Prime membership program, which includes Prime Video, Prime Music, Prime Reading, and other benefits. Prime Video has more than 200 million users worldwide, according to Amazon.

“This is a huge deal for Amazon because it gives them a massive library of content that they can use to drive more Prime subscriptions and more engagement on their platform,” said Daniel Ives, an analyst at Wedbush Securities. “MGM is a crown jewel in terms of content and IP, and this will give Amazon a significant edge in the streaming wars.”

However, the deal also faces some potential challenges, such as regulatory scrutiny, integration issues, and creative differences. Amazon has faced criticism from lawmakers and regulators over its market power and business practices, and the acquisition of MGM could raise antitrust concerns. The deal could also face opposition from some Hollywood talent and producers, who may prefer to work with independent studios rather than tech giants.