Comcast to Buy DreamWorks for $3.8 Billion--Update
April 28 2016 - 10:10AM
Dow Jones News
By Anne Steele, Ben Fritz and Dana Mattioli
Comcast Corp. on Thursday said it agreed to buy DreamWorks
Animation SKG Inc. for about $3.8 billion, a deal that could make
the cable giant a rival to Walt Disney Co. in the lucrative
family-entertainment business.
In the transaction, expected to close by the end of the year,
DreamWorks Animation stockholders will receive $41 in cash for each
DreamWorks share.
The purchase price is a premium of 27% over DreamWorks' close on
Wednesday and a premium of 51% over its closing price on Tuesday,
before The Wall Street Journal reported the companies were in
merger talks.
DreamWorks Animation co-founder Chief Executive Jeffrey
Katzenberg will become chairman of DreamWorks New Media, which will
be comprised of the company's ownership interests in Awesomeness TV
and NOVA.
Mr. Katzenberg has been seeking a buyer for his studio, one of
the last in Hollywood not part of a larger conglomerate, for
several years.
"NBCUniversal is the perfect home for our company," said Mr.
Katzenberg.
The deal includes a $200 million reverse breakup fee related to
antitrust approval, according to a Comcast filing.
Comcast's Universal Pictures studio has enjoyed success in
recent years with its animated "Despicable Me" and "Minions" movies
but is still a relatively small player.
Its parent company, though, has been moving aggressively to
mimic Disney by using its animation properties to build out its
consumer products and theme parks businesses, a strategy that could
be accelerated by the addition of DreamWorks, which makes the
"Shrek," "Kung Fu Panda," and "Madagascar" movies, among
others.
Shares of Comcast fell 0.8% to $60.84 in early trading while
DreamWorks shares were halted for the news at $32.20.
The Justice Department and the Federal Trade Commission will
decide which agency reviews the transaction from an antitrust
perspective, according to the Comcast filing. The transaction
doesn't require Federal Communications Commission approval.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
April 28, 2016 09:55 ET (13:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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