Comic Books! : Disney to Acquire Marvel Entertainment

Disney to Acquire Marvel Entertainment

Worldwide leader in family entertainment agrees to acquire Marvel and its portfolio of over 5,000 characters.

Acquisition highlights Disney’s strategic focus on quality branded content, technological innovation and international expansion to build long-term shareholder value

Burbank, CA and New York, NY, August 31, 2009 —Building on its strategy of delivering quality branded content to people around the world, The Walt Disney Company (NYSE:DIS) has agreed to acquire Marvel Entertainment, Inc. (NYSE:MVL) in a stock and cash transaction, the companies announced today.

Under the terms of the agreement and based on the closing price of Disney on August 28, 2009, Marvel shareholders would receive a total of $30 per share in cash plus approximately 0.745 Disney shares for each Marvel share they own. At closing, the amount of cash and stock will be adjusted if necessary so that the total value of the Disney stock issued as merger consideration based on its trading value at that time is not less than 40% of the total merger consideration.

Based on the closing price of Disney stock on Friday, August 28, the transaction value is $50 per Marvel share or approximately $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, unparalleled global portfolio of entertainment properties, and a business structure that maximizes the value of creative properties across multiple platforms and territories,” said Robert A. Iger, President and Chief Executive Officer of The Walt Disney Company. “Ike Perlmutter and his team have done an impressive job of nurturing these properties and have created significant value. We are pleased to bring this talent and these great assets to Disney.”

“We believe that adding Marvel to Disney’s unique portfolio of brands provides significant opportunities for long-term growth and value creation,” Iger said.

“Disney is the perfect home for Marvel’s fantastic library of characters given its proven ability to expand content creation and licensing businesses,” said Ike Perlmutter, Marvel’s Chief Executive Officer. “This is an unparalleled opportunity for Marvel to build upon its vibrant brand and character properties by accessing Disney’s tremendous global organization and infrastructure around the world.”

Under the deal, Disney will acquire ownership of Marvel including its more than 5,000 Marvel characters. Mr. Perlmutter will oversee the Marvel properties, and will work directly with Disney’s global lines of business to build and further integrate Marvel’s properties.

The Boards of Directors of Disney and Marvel have each approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, certain non-United States merger control regulations, effectiveness of a registration statement with respect to Disney shares issued in the transaction and other customary closing conditions. The agreement will require the approval of Marvel shareholders. Marvel was advised on the transaction by BofA Merrill Lynch.

Update from Comic Book Resources:

There have been a number of developments since the initial press release about Disney’s acquisition of Marvel went out. Disney held a conference call with investors that just finished to discuss the deal and while much of it was focused on the financial aspect of the deal – with regards to both current and future opportunities – there were a number of comments concerning publishing and Marvel’s film slate that are of interest. The bullet points are:

Existing licensing and distribution deals should remain where they are.
Disney believes there’s real opportunity with the Marvel catalog of characters and will work on where those opportunities are greatest and how best to leverage them across the existing Marvel and Disney infrastructure.
Disney executives went to great lengths during the call to make the point that they don’t pretend to be more expert than Marvel is in handling their characters, citing the hands-off relationship Disney has had with Pixar since the acquisition of that studio. Disney said Marvel manages the properties from a business perspective very intelligently and trusts them to make the right decisions for these products for a long time to come.
Disney said the deal was attractive not just because they’re buying great characters, stories and brand, but about working with people who know these characters best and how best to work with them in other media.
Again, referencing the Pixar deal, Disney finds working as one company with Marvel removes friction and creates value that’s very compelling. Licensing offers very attractive opportunities, but nothing is better than being one. International expansion of Marvel properties through Disney was cited as a potential growth area.
Cable channel Disney XD is currently running about 20 hours a week of Marvel content and Disney has been looking to license more Marvel content and this deal gives them that opportunity as well as the opportunity to expose these characters internationally.
With regards to video game publishing, Disney praised Marvel’s licensing agreements with some of the best video game producers and publishers in the business and said moving forward they will consider what’s best for each individual property as each licensing deal comes up for renewal and that there would likely be a blend of licensed and self-produced/self-distributed titles.
With respect to Paramount’s distribution deal with Marvel and the Iron Man franchise, Disney has every intention to respect the deal that’s in place, but noted that it’s in their best interest, overtime, to become the sole distributor of Marvel films.
Will Disney3D be used for Marvel movies? That will be determined by those who are in charge of producing Marvel’s theatrical films.
When asked if there was potential for cross-polination between Marvel and Pixar, Disney said that Pixar’s John Lasseter has met with key Marvel creative executives recently and the group got “pretty excited, very fast.” Disney will look at all opportunities and thinks there are some exciting product that could come from this sort of partnership.
Disney said this deal is expected to benefit Marvel’s retail efforts, being able to leverage Disney’s shelf space and relationships with major chains and distributors.
The deal began when Disney Chief Executive Bob Iger reached out to Marvel Chief Executive Ike Perlmutter earlier this year. Again, Disney noted that they believe in the creative team at Marvel and see no reason to upset that applecart.
Disney has not made any real estate decisions and sees no reason to move Marvel Studios from their headquarters in Manhattan Beach, California. No mention of Marvel Publishing’s offices in New York City was made.