Screen shot 2011 01 20 at 09.32.39 Amazon to acquire LoveFilm, the European NetflixLoveFilm has announced this morning that Amazon is to acquire the remaining shares in the movie rental and streaming service, which is similar to Netflix.

Amazon already has a significant minority shareholding in LoveFilm and deal has been rumoured for some time. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first quarter of 2011.

Exactly what this means in terms of the company being rebranded as an Amazon service is unclear at present, but the move gives the US retail giant a big foot in the European online video market. LoveFilm operates in the UK, Germany, Sweden, Norway and Denmark. Simon Calver, Chief Executive of LoveFilmInternational says in the company’s announcement, “With Amazon’s unequivocal support we can significantly enhance our members’ experience across Europe.”

In the US, Amazon operates a video-on-demand service offering HD movie rentals. It seems logical that LoveFilm will become the footing for a European expansion of that product. Like Netflix, LoveFilm started by offering DVD rentals by post before expanding to online streaming, first in the browser before expanding more recently to the Sony Playstation 3 and a range of Sony and Samsung TVs, Blur-Ray players and home theatre devices. We’ll be watching developments with this story closely.