Comcast to acquire DreamWorks Animation

Tom Paine

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NBCUNIVERSAL ANNOUNCES DREAMWORKS ANIMATION ACQUISITION
(Comcast)

How the Comcast-DreamWorks deal came together so fast (LA Times)




-DreamWorks Animation valued at about $3.8 billion.

-"Acquisition builds on NBCUniversal’s presence in family and animation space. DreamWorks Animation to become unit of Universal Filmed Entertainment."

-Illumination Entertainment (unit of NBCUniversal) founder Chris Meledandri to "help guide the growth of the DreamWorks Animation business in the future."

-Jeffrey Katzenberg will become Chairman of DreamWorks New Media, which will be comprised of the company’s ownership interests in Awesomeness TV and NOVA.

-Agreement has been approved by the boards of directors of DreamWorks Animation and Comcast, and the controlling shareholder of DreamWorks Animation has approved the agreement by written consent.

-Transaction is expected to close by the end of 2016.


Update: WSJ reports that Dreamworks Animation CEO Jeffrey Katzenberg will step down from the company if Comcast acquires it. Presumably, this gives more substantiation to the entire acquisition scenario.

Comcast is reportedly in talks to buy DreamWorks Animation, the Wall Street Journal reports.

The reported price, if a deal occurred, would be more than $3 billion, a premium over the studio's current market value of $2.35 billion.

DreamWorks, founded in 2004 as a new kind of studio, has had some major successes, but is often perceived as too small for a stand alone studio. Like a small driller, it suffers if it hits a few dry wells. Last year a series of less than successful releases forced the company to cut 500 jobs, close its studio in Northern California and make management changes.

For Comcast, the deal would expand its successful animation business, with major implications for its theme parks and international expansion.

But the LA Times cautions that there have been several prior discussions by others with DreamWorks that ended without results.

The Journal suggests a deal would make Comcast a more formidable challenger to Disney in family entertainment, bringing back memories of its failed attempt to acquire Disney in 2004. Comcast reports earnings tomorrow, but rarely comments on breaking news at that time.