[NEWS] Walt Disney to buy Marvel Entertainment for $4 bn

[VenumX]

Walt Disney to buy Marvel Entertainment for $4 bn
Press Trust of India / New York August 31, 2009, 21:46 IST

Entertainment major Walt Disney Company will acquire Marvel Entertainment, the firm well known for comics of super heroes, for an estimated $4 billion in a cash and stock deal.

The proposed transaction has been approved by the boards of both companies.

Walt Disney in a statement today said that based on the closing price of Disney stock on August 28, the transaction value is $50 per Marvel share or about $4 billion.

"This transaction combines Marvel's strong global brand and world-renowned library of characters including Iron Man, Spider-Man, X-Men, Captain America, Fantastic Four and Thor with Disney's creative skills...," Walt Disney's President and Chief Executive Officer Robert A Iger said.

Under the deal, Disney would acquire ownership of Marvel including its more than 5,000 Marvel characters.

"Disney is the perfect home for Marvel's fantastic library of characters given its proven ability to expand content creation and licensing businesses," Marvel's Chief Executive Officer Ike Perlmutter said.

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UPDATE 4-Disney to acquire Marvel in $4 billion deal
08.31.09, 02:27 PM EDT
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By Paul Thomasch and Gina Keating

NEW YORK/LOS ANGELES, Aug 31 (Reuters) - Walt Disney Co agreed buy Marvel Entertainment Inc for $4 billion in a deal that would add characters such as Iron Man, Spider-Man and the Fantastic Four to its entertainment empire.

Disney is striking the biggest media deal of the year -- one that unites the Incredible Hulk and Mickey Mouse -- at a time when the entertainment business is struggling to cope with big spending cutbacks by both consumers and advertisers.

It is also paying a substantial price, a 29 percent premium for Marvel shareholders, and is undertaking its largest acquisition since the $7.6 billion purchase of Pixar in 2006.

But none of those risks deterred Disney from seeking out a deal to address an area of concern among investors: How can it better reach more young males.

'This helps give Disney more important exposure to the young male demographic that they have sort of lost some ground with in recent years,' said David Joyce, an analyst with Miller Tabak & Co.

Indeed, Disney has long been a blockbuster brand with girls thanks to characters such as 'Hannah Montana,' 'Cinderella' and 'Snow White,' but has struggled to achieve the same kind of success with boys.

Movies such as 'Iron Man 2,' due to hit the theaters next year, or 2011's 'Spider-Man 4' and 'Avengers' should help resolve that issue.

Moreover, Disney will be able to use its marketing and entertainment might -- stretching from ABC to cable television to theme parks -- to promote and build characters such as 'Thor' in ways Marvel never could.

To acquire Marvel, Disney agreed to pay a total of $30 per share in cash plus about 0.745 Disney shares for each Marvel share they own. The deal was approved by the boards of both companies.

The shares of Marvel, which was founded in 1939 and rolled out its first blockbuster character, Captain America, in 1941, shot up to a high of $49.29 before falling a bit to $48.38 in afternoon trading.

Disney approached Marvel a few months ago 'to get to know them,' Disney Chief Financial Officer Tom Staggs told Reuters on Monday. The overture began with a meeting between Disney Chief Executive Robert Iger and Marvel CEO Ike Perlmutter and evolved into merger discussions over a series of meetings, Staggs said.

'We at Disney had admired them because of their position and asset base,' Staggs said. 'With conversations over time we came to believe in the value of a combination.'

The shares of Disney, which will acquire ownership more than 5,000 Marvel characters, were down about 3.5 percent in afternoon trading. The deal is expected to close close by year-end, but will not add to Disney earnings until fiscal 2012.

The acquisition came as a surprise, even though Iger had mentioned recently the company would consider acquisitions that bolstered Disney brands across international markets and on new technology platforms.

While it could kick-start more deal making in the media sector -- where stocks have outperformed the broader Standard & Poor's 500 this year -- few analysts see another bidder making a play for Marvel.

A major reason is the presence of Marvel's Perlmutter, who owns 37 percent of the company and will continue to oversee it within the Disney empire. Perlmutter will trade his stake in Marvel for a 1 percent stake in Disney, but will not receive a seat on its board of directors -- as did Pixar CEO Steve Jobs, a Disney spokesman said.

Disney executives drew a number of parallels between the Pixar and Marvel deals, and suggested it would keep the Marvel brand intact.

'The goal here is not to rebrand Marvel,' Iger said on a conference call.

Caris & Co analyst David Miller said Disney was 'sandbagging a little' by estimating the deal would not add to its earnings for another two years.

'They said the same thing with the Pixar deal,' said Miller, who has 'above average' ratings on both Disney and Marvel. 'I think they will make it accretive a lot sooner. They are underpromising, as they always do.'

Miller said Disney would have to wait until Marvel's five- picture distribution deal with Viacom Inc's

Paramount expires to realize the full economic benefit of its films, but would immediately see a boost from its licensing operations.

'This is going to catapult Disney's consumer products line in a huge way,' Miller said. 'I believe this is going to do more for Disney Consumer Products than for the film studio.'

(Reporting by Paul Thomasch; additional reporting by Franklin Paul, Gina Keating and John Tilak; editing by Derek Caney and Andre Grenon)

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[claudius]

thats crazy im so upset right now disney is going to ruin it i aleady hate this new ironman spiderman cartoons on tv 90's xmen and spiderman cartoon was the shit

[VenumX]

“ Originally Posted by claudius ”

thats crazy im so upset right now disney is going to ruin it i aleady hate this new ironman spiderman cartoons on tv 90's xmen and spiderman cartoon was the shit

yeah this is crazy they're gonna make like MARVEL JUNIORS on DISNEY CHANNEL i know it...lol....i can see it now...todler versions of all the marvel characters

[hctr68]

AAAAAAAAAAAAHHHHHHH! thamn Disney is like the Walmart of the entertainment industry, they keep buying all of these companies---they just better not try to rebuild the marvel franchise cause they will so kill it :< the only one thing i like is that they show re-runs of the 90's marvel cartoons on one of there cable chnls.

[forty01]

We'll see... I can say that Disney has made some good moves in years of late. Think about their standings 10 years ago and look at them now. They are making many of the right decisions. They definitely need to stay aggressive with Marvel and not turn it to the Batman/Superman of old :) It's a different time.

[PsyChoTk]

now its all the kids versions of all the olde favs. no one has any human problems, everybody just woke up and had thier powers.

[forty01]

“ Originally Posted by PsyChoTk ”

now its all the kids versions of all the olde favs. no one has any human problems, everybody just woke up and had thier powers.

Great for Kids, sux for us. I enjoyed the classics.

[parna1973]

For that kinda money you wouldnt even think about...but oh well considering marvel being around for a while...probably made a bunch already and to top it off another 50 bill...lol

[D/\SH]

damn i hope they dont ruin marvel and such as other have said..... but you have to remember abc, disney, espn, and now marvel will all be owned by the same.... there are shows that they keep adultt still so hopefully they will keep the current marvel staff that they have and jut work under a different name like alltel is doing in some areas that they arent merging to verizon.

[forty01]

“ Originally Posted by D/\SH ”

damn i hope they dont ruin marvel and such as other have said..... but you have to remember abc, disney, espn, and now marvel will all be owned by the same.... there are shows that they keep adultt still so hopefully they will keep the current marvel staff that they have and jut work under a different name like alltel is doing in some areas that they arent merging to verizon.

That was my feel as well(Having Adult Entertainment... I'm not referring to that :D lol

[GokuSS3]

I think Disney is Smart not Stupid. I think they see the money that Marvel has made off there movies among everything else. I think that this could have a postive out come on the both Companies. But I guess only time will tell that now!!!!

[ronaldsdv]

I just hope that the movies get better and better ....

[D/\SH]

“ Originally Posted by ronaldsdv ”

I just hope that the movies get better and better ....

they will just wait for the flash to get stepped on my dumbo the elephant in the next movie... gonna be great :)

[ronaldsdv]

“ Originally Posted by D/\SH ”

they will just wait for the flash to get stepped on my dumbo the elephant in the next movie... gonna be great :)

hahaha lot's of people will go crazy on that hahaha

[broSki]

u guys are nuts lol...they bought over their characters and shares doesnt mean marvel lost everything. Marvel still runs marvel, it doesnt mean disney tells em to do this they have to...the deal was made for both companies best interest, 1) to attract young men and women, teenagers and young adults to disneyland with the marvel themes they will ad to the park, and 2)marvel is going to make maybe 4 to 5x the amount of money they were making before, why? b/c disney has one of the best marketing campaigns and are affiliated with countless companies which will be good for marvels revenue in the end.

With all that being said...Walt Disney are genious's lol