Disney has dropped a cool $4 billion gamble on buying out Marvel Entertainment, the company that holds the rights to make films from Marvel Comic characters. The company has been turned around in the last few years and has gone from rags to riches and is now seen as one of the money engines for Hollywood.
Marvel brought us the Spider-man, Fantastic Four, X-Men, the Incredible Hulk, Iron Man, Daredevil and the Punisher, to name but a few. In fact most superhero movies except Superman and Batman, the top DC Comics characters.
Marvel shareholders will get $30 a share in cash plus 0.745 of a Disney share for each Marvel share they own. There are provisions that the amount of Disney stock issued in the deal is not less than 40% of the total consideration, meaning that the cash could go as high as 60% or $2.4 billion, which is a big chunk of the $3.1 billion of cash that Disney holds. However the company is heavily cash positive, generating $3.3 billion of cash last year, so this should not represent a cash drain.
‘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, unparalleled global portfolio of entertainment properties, and a business structure that maximizes the value of creative properties across multiple platforms and territories,’ said Robert Iger, Disney CEO.
‘We believe that adding Marvel to Disney’s unique portfolio of brands provides significant opportunities for long-term growth and value creation,’ Iger said.
Under the deal, Disney will acquire ownership of Marvel including more than 5,000 Marvel characters. Ike Perlmutter, Marvel CEO will continue to oversee the Marvel properties and its integration with Disney.
The deal has already been approved by both Boards and the usual hurdles including shareholder approval and anti-trust approval will all be needed before the deal can close.
There have been a variety of films made by studios other than Disney, and Sony Pictures still has the Spider-man franchise (we’re not sure how many films it has left to run) but this will give Disney the first shot at harnessing each of the characters that have not yet been turned into motion pictures, as well as putting together more web properties and cartoons based on them. It is possible that Disney will also leverage its largest shareholder Steve Jobs, the CEO at Apple, to create closer ties between Marvel characters and iTunes.