Online DVD rental service Lovefilm has taken over Amazon's UK and German DVD rental businesses in a deal which sees Amazon become its biggest shareholder.
Lovefilm will have 20% of the UK DVD rental market
As part of the deal, Amazon will make a cash investment in Lovefilm.
Amazon's DVD rental customers will be switched to Lovefilm, whose customer base will rise to 900,000 while its UK market share will rise to 20%.
Lovefilm subscribers receive DVDs by post and do not have to return them within any particular length of time.
Its services will now be promoted on Amazon's UK and German websites.
Lovefilm's other investors include private equity backers and the firm's management.
Its main direct competitor is Blockbuster online.