Disney Buys Marvel Entertainment
Walt Disney Co. announced plans this morning to purchase Marvel Entertainment for $4 billion.
Under the deal, Disney will acquire ownership of Marvel, including it’s library of more than 5,000 characters, such as Iron Man, Spider-Man, Captain America and the Hulk.
The acquisition makes Disney a partner with rivals Paramount Pictures, Sony Pictures Entertainment and 20th Century Fox, all of which have long-term deals to distribute movies based on comic book characters.
Paramount, a unit of Viacom, has an agreement to distribute five Marvel films, including two “Iron Man” sequels, over the next few years. Disney said it would honor the contract, but the goal is clearly to bring Marvel’s movies in-house.
“We believe Viacom is unlikely to retain distribution rights to Marvel films after the agreement” ends, said Michael C. Morris, a UBS analyst. A Paramount statement read in part, “We look forward to continuing to work with Marvel and, with today’s announcement, to working with Disney.”
According to Disney’s Senior Executive Vice President and CFO, Tom Staggs, Marvel shareholders will receive $30 in cash as well as .745 Disney shares for each Marvel share they own. Disney will give approximately 59 million shares for the $4 billion deal. Stagg said Disney expects minor dilution for 2010, but expects to start seeing some impact through Marvel by 2012.
Reaction to the deal, which was valued at about $50 a share — a 29 percent premium, has been mixed. On Monday, Marvel shares shot up 25 percent to about $48, while Disney shares fell 3 percent to about $26.
Although boards of both companies have approved the transaction, it will require an antitrust review and the approval of Marvel shareholders.