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Disney Buys Marvel Entertainment: $4 Billion Acquisition
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by Blaine Metzgar | August 31, 2009 at 11:00 am
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Walt Disney announced Monday, August 31, 2009, that the company will buy comic-mecca Marvel Entertainment for about $4 billion. Disney's acquisition of Marvel stands as their largest since the purchase of Pixar Animation Studios in 2006.
With the acquisition of Marvel, Disney adds a new layer of characters to their already impressive roster of animated personalities. Marvel classics like Spider-Man, the X-Men, Captain America, Iron Man, et al. will join the ranks of Mickey, Nemo, Aladin, and Simba to monopolize on the media industry.
Disney Chief Executive Robert Iger said during a conference call Monday that Marvel was an attractive target for Disney despite the challenges facing the media industry, such as the decline of DVD sales, that has hurt profitability at major film studios.
"They're not bulletproof. They are not immune from the changes that we're seeing, but they have established a footing that we think is more solid than what you typically see in the nonbranded non-character driven movie," said Iger.
With the acquisition Disney grants Marvel shareholders some perks of joining the entertainment conglomerate that is Walt Disney Company.
Under the agreement, Marvel shareholders will receive $30 a share in cash plus about 0.745 Disney share for each Marvel share. Based on Friday's closing prices, the deal is valued at $50 per Marvel share, about a 29% premium.
With the dolling out of Disney shares for the effuctuation of the acquisition the company has already stated they will be buying out those shares over the coming years so to not dillute the existing pool of shareholders.
Staggs said he expects the deal to be dilutive to Disney shareholders in its fiscal 2010 by a a mid-single-digit percentage, but he expects it to be accretive to shareholders within two years.
The companies said the amount of cash and stock in the deal will be adjusted at closing so that the value of the Disney stock is at least 40% of the purchase price. Besides shareholder backing, the deal will require antitrust approval.
What do you think? Was Disney's purchase of Marvel a smart move? Does it run the risk of becoming monopoly?
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Most RecentMost Recommended Comments (1)
at 21:08 on August 31st, 2009
This would be exciting. Surely they will create another great characters. Characters in Disney is so different from Marvel. But if this will put up combination of these characters, kids will have great things to wait for. Disney films and Marvel films sell incredibly well – so the business move makes sense, and it's doubtful that Spiderman will battle a singing rabbit. In the last few years, entertainment revenues have slipped, especially in the face of recession. So when hard money loans are put up by Disney as Disney buys Marvel – rest easy, Marvel's integrity won't suffer.