Online retailer Amazon is to become the largest shareholder in DVDs-by-post company Lovefilm in a deal that will bring together the two firms' competing UK film rentals businesses.
Lovefilm, which runs services under its own name and also for partners including Odeon cinemas and the Guardian, will acquire Amazon Europe's rival DVD rental business in the UK and Germany.
Amazon Europe will also "make a cash investment" and become the largest shareholder in Lovefilm. Amazon will also promote Lovefilm on its UK and German sites.
Once the deal goes through - subject to approval by regulators - the new Lovefilm subscriber base will be more than 900,000 customers spread across the UK, Germany and Scandinavia.
The two companies said in a joint statement that no job cuts were planned at Amazon's German or UK operations as a result of the deal.
Online DVD rental services have been booming since they came to Britain in 2004, drawing in customers with the promise of convenience and no late fees.
While high street rental stores have been closing down as business dwindles, the latest full-year figures show online rentals in 2006 moved in the opposite direction to over the counter, soaring 19%.
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