August 31, 2009 / 1:57 PM / 9 years ago

INSTANT VIEW: Disney to buy Marvel in $4 billion deal

NEW YORK (Reuters) - Walt Disney Co said it plans to buy Marvel Entertainment Inc for $4 billion in a deal that would add characters like Iron Man, Spider-Man, and the Fantastic Four to its entertainment empire.



“My initial reaction is that this is a positive. a win-win situation for both companies. On the surface, it looks like a great merger.”

“They’re (Marvel shareholders) getting a good deal in my opinion. The CEO of the company, Isaac Perlmutter, is also the largest shareholder of the company. From that standpoint, we think the chances of this deal going through are pretty high.”


“Marvel brings 5,000 characters that they can monetize over multiple platforms. It’s a strategy that they have done since their start. So I think that it’s definitely in line with the Disney strategy. That’s one positive aspect of the strategic rationale here.

“This helps give Disney more important exposure to the young male demographic that they have sort of lost some ground with in recent years. When you look at the kind of TV shows on their cable networks, and the Disney consumer products line for the princess and fairies — the Hannah Montana kind of stuff — it shows that they have a lot of strength addressing young female demographic. The broad popularity, as well as the nature of these Marvel comics, I think helps it to be additive to Disney’s demographic exposure.”

“The last big deal was Pixar. Disney is still generating a lot of free cash flow. That’s why its $30 a share in cash. It does seem to be pretty full price for Marvel. But once it’s integrated into Disney’s production and distribution platform, I think the synergies will help make that price more palatable.”

On theme parks:

“There will be a long tail of unwinding of various types of partnerships that Marvel has with other Disney competitors. It’s not unusual for competitors to share some risk and do some deals together...There is going to be a lot of industry cross-pollination deals that will unwind over time, but nothing immediate.


“We think deal makes sense strategically...It will help Disney target the male demographic aged 18 and 35 years old, a group that it currently has limited appeal to. Disney will also be able to monetize Marvel’s brands across its entire ecosystem (TV, parks, movies, consumer products, video games, etc.)”

“Our quick calculation suggests the deal will be about $0.07 to $0.10 accretive to Disney.”

Reporting by John Tilak in Bangalore and Franklin Paul in New York, compiled by Tiffany Wu

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