Amazon announced today that it has acquired Lovefilm, one of the leading European movie rental services. Amazon already owned a minority share of the company, and will now acquire the remaining shares in the company. The terms of the sale were not disclosed, but varying reports estimate its value to be between $200 million and approximately $270 million.

Akin to Netflix state-side, Lovefilm offers subscription services with both rental-by-mail and streaming access to films and TV shows on to PCs, Internet TVs and Playstation 3. The company operates in the U.K., Germany, Sweden, Norway, and Denmark and has 1.6 million members.

“The deal is a winner for the members who love Lovefilm because of its value, choice, convenience and innovation in home entertainment,” says Lovefilm’s CEO Simon Calver. “With Amazon’s unequivocal support we can significantly enhance our members’ experience across Europe.”

Amazon already offers its own streaming rental service in the U.S., although it hasn’t had as much attention as Amazon’s e-commerce and e-books sectors. But with the increasing demand for video-on-demand, and with rumors of a Netflix expansion into global markets, the acquisition seems well timed.

Obviously, this will boost Amazon’s position in Europe, but as Amazon already has a strong interest in and connections to the entertainment industry – it is the owner of the movie database IMDb, for example – Amazon’s plans for building out a rental service may be much larger.

audrey watters