MGM studios to be bought by Sony

One of MGM's best loved films is The Wizard of Oz

Hollywood's last major independent studio, Metro-Goldwyn-Mayer (MGM), says it has agreed in principle to be bought by Japan's Sony Corporation. US media group Time Warner earlier withdrew its bid for MGM, saying it could not agree on a price.

The Sony offer is reported to be $5bn (£2.78bn), over half in cash and the remainder the assumption of MGM debts. The deal will give Sony access to MGM's film library, a key source of cash as more movies are released on DVD.

MGM classics include Ben Hur, Gone With the Wind and The Wizard of Oz; it also has the rights to James Bond films.

MGM was founded in the golden age of Hollywood in 1924 after a mergez between Metro Pictures Corporation, Goldwyn Pictures, and Louis B Mayer Productions. The iconic studio has been in talks with bidders for several months, and a decision on the sale is now expected to come within days.