Disney to Acquire Marvel Entertainment

Disney to Acquire Marvel Entertainment


Jay Cochran - 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.

Investor Conference Call:

An investor conference call will take place at approximately 10:15 a.m. EDT / 7:15 a.m. PDT today, August 31, 2009. To listen to the Webcast, turn your browser to https://corporate.disney.go.com/investors/presentations.html or dial in domestically at 800-260-8140 or internationally at 617-614-3672. For both dial-in numbers, the participant pass code is 51214527.

The discussion will be available via replay on the Disney investors website through September 14, 2009 at 7:00 PM EDT/4:00 PM PDT.

About The Walt Disney Company

The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, interactive media and consumer products. Disney is a Dow 30 company with revenues of nearly $38 billion in its most recent fiscal year.

About Marvel Entertainment, Inc.

Marvel Entertainment, Inc. is one of the world’s most prominent character-based entertainment companies, built on a library of over 5,000 characters featured in a variety of media over seventy years. Marvel utilizes its character franchises in licensing, entertainment (via Marvel Studios and Marvel Animation) and publishing (via Marvel Comics).

Forward-Looking Statements:

Certain statements in this communication may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to a variety of matters, including but not limited to: the operations of the businesses of Disney and Marvel separately and as a combined entity; the timing and consummation of the proposed merger transaction; the expected benefits of the integration of the two companies; the combined company’s plans, objectives, expectations and intentions and other statements that are not historical fact. These statements are made on the basis of the current beliefs, expectations and assumptions of the management of Disney and Marvel regarding future events and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Neither Disney nor Marvel undertakes any obligation to update or revise these statements, whether as a result of new information, future events or otherwise.

Actual results may differ materially from those expressed or implied. Such differences may result from a variety of factors, including but not limited to:

* legal or regulatory proceedings or other matters that affect the timing or ability to complete the transactions as contemplated;
* the possibility that the expected synergies from the proposed merger will not be realized, or will not be realized within the anticipated time period; the risk that the businesses will not be integrated successfully;
* the possibility of disruption from the merger making it more difficult to maintain business and operational relationships;
* the possibility that the merger does not close, including but not limited to, due to the failure to satisfy the closing conditions;
* any actions taken by either of the companies, including but not limited to, restructuring or strategic initiatives (including capital investments or asset acquisitions or dispositions);
* developments beyond the companies' control, including but not limited to: changes in domestic or global economic conditions, competitive conditions and consumer preferences; adverse weather conditions or natural disasters; health concerns; international, political or military developments; and technological developments.

Additional factors that may cause results to differ materially from those described in the forward-looking statements are set forth in the Annual Report on Form 10-K of Disney for the year ended September 27, 2008, which was filed with the Securities and Exchange Commission (“SEC”) on November 20, 2008, under the heading “Item 1A—Risk Factors” and in the Annual Report on Form 10-K of Marvel for the year ended December 31, 2008, which was filed with the SEC on February 27, 2009, under the heading “Item 1A—Risk Factors,” and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by each of Marvel and Disney.

Important Merger Information and Additional Information:

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction, Disney and Marvel will file relevant materials with the SEC. Disney will file a Registration Statement on Form S-4 that includes a proxy statement of Marvel and which also constitutes a prospectus of Disney. Marvel will mail the proxy statement/prospectus to its stockholders. Investors are urged to read the proxy statement/prospectus regarding the proposed transaction when it becomes available, because it will contain important information. The proxy statement/prospectus and other documents that will be filed by Disney and Marvel with the SEC will be available free of charge at the SEC's website, www.sec.gov, or by directing a request when such a filing is made to The Walt Disney Company, 500 South Buena Vista Street, Burbank, CA 91521-9722, Attention: Shareholder Services or by directing a request when such a filing is made to Marvel Entertainment, Inc., 417 Fifth Avenue New York, NY 10016, Attention: Corporate Secretary.

Disney, Marvel, their respective directors and certain of their executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of Marvel is set forth in its definitive proxy statement, which was filed with the SEC on March 24, 2009. Information about the directors and executive officers of Disney is set forth in its definitive proxy statement, which was filed with the SEC on January 16, 2009. Investors may obtain additional information regarding the interests of such participants by reading the proxy statement/prospectus Disney and Marvel will file with the SEC when it becomes available.





Comments...

Last 10 comments - ( Read All Posts )
wm10k - 2009-09-05 @ 11:53 pm

...sure, Disney puts out a ton of bland boring crap under its own brand.

That's Disney's public face. It is a brand, nothing more. They are catering to a market.

The Disney you don't commonly see are the executives that only care about the dollar. Entertainment is all money driven. It's not about toning things down, its all about what is going to make a good return.

What sells, sells. Why mess with a good thing.

Nothing will be toned down. That is what subsidiaries are for. Subsidiaries can get their hands dirty.

DRACOREX - 2009-09-02 @ 7:51 pm

I never said that Disney did and I blame Tarantino for the cuts and not having the sac to to put the full thing out. We could use a good NC-17 movie every once in awhile. However, you know there will be some junk out there because of it. I would worry more about things getting to kiddie.

On a different note, I might finally get a Howard the Duck action figure wither better articulation.

Jmacq1 - 2009-09-02 @ 3:48 pm
I am not saying that Disney will come in an wreck the figures, comics, movies, cartoons, and whatever else right off the bat. I just think something could happen eventually. As far as Miramax, Kill Bill was supposed to be way more violent and the fight scene with the Crazy 88 was toned down and even grainy at some points. Pirates, those movies were crap and had it not been for the kid hanging I would not know I was watching a movie about pirates...of course I was only watching for Keira Knightley anyway. I just cannot see Disney staying out of any of it for very long. They would be crazy not to just kids and comics go together like kids and...well, Disney.

What you and others apparently fail to see is that you can market Marvel characters to kids and market Marvel characters to teens/adults at the exact same time. Marvel's been doing that very thing for years. Disney has little traction with teen and adult males, and Marvel gives them a gateway to that audience. They'd be idiots to throw that away, and given their success, it's reasonable to assume that Disney is not run by idiots. They'll know that most comics are bought by teens and adults. They're not going to toss that buying audience away to cater to an audience that barely exists. Kids don't buy comics because they have no interest in comics, and instead like video games, movies, collectible card games, etc..... It's got nothing to do with the content.

As for Kill Bill, if it had been more violent, it would have probably gotten an NC-17 rating which Quentin Tarantino would have trimmed down to an "R" anyway. Either way, there's no way in Hades you can try to claim that Disney forced Kill Bill to become "family friendly."

DRACOREX - 2009-09-02 @ 3:21 pm

I am not saying that Disney will come in an wreck the figures, comics, movies, cartoons, and whatever else right off the bat. I just think something could happen eventually. As far as Miramax, Kill Bill was supposed to be way more violent and the fight scene with the Crazy 88 was toned down and even grainy at some points. Pirates, those movies were crap and had it not been for the kid hanging I would not know I was watching a movie about pirates...of course I was only watching for Keira Knightley anyway. I just cannot see Disney staying out of any of it for very long. They would be crazy not to just kids and comics go together like kids and...well, Disney.

Jmacq1 - 2009-09-02 @ 11:28 am
Damn Jamac your quite passionate about Disney huh?

Marvel has a HUGE fanbase and Disney realizes this. They also realize that most of that fanbase doesn't give a flip about Disney. Them buying Marvel know guarantees them money from that fanbase (Billions). I seriously doubt they are going to try and change things and alienate that fanbase and piss people off to the point they boycott. I doubt they would try and (Kiddie up) Marvel.

They most likely will leave all the titles, movies and what not alone considering that it's worked pretty good the past few years. Why fix what isn't broken? Clearly Marvel is a HUGE money maker considering Disney paid over 4 Billion dollars to buy them.

I don't give a flying f**k about Disney. I just think people are being completely retarded with their reactions to this, and refusing to look at it with even the slightest hint of common sense -or- business sense.

Feihong covered most of what I'm trying to say. Especially the bit about separating Walt Disney Pictures (and I would add the Disney Parks to this) from Disney as an overall corporation. Disney as a corporation puts out TONS of adult-oriented material and nobody bats an eye.

The other thing I think needs to be distinguished is the difference between Marvel Entertainment (the overall corporation that's just been bought) and Marvel Publishing (the branch of that corporation that actually creates the comics). Marvel Publishing is one of the smallest portions of Marvel Entertainment. It's profitable, but it's a tiny, tiny fraction of Marvel's overall revenue. Marvel's real money comes in the licensing of their characters.

Disney didn't buy Marvel to break into the comic book business, which has been reduced to a dwindling niche market. They bought Marvel for the licensing of their characters. Disney isn't going to care enough about Marvel Publishing to interfere with it. It doesn't make waves as it stands, and it pulls in a profit. The general public doesn't pay any attention to comic books until one of the EICs gets on TV and screams "ZOMG THIS CHARACTER IS DYING IN THIS ISSUE BUY MORE COMICS!"

Nobody except the most deranged of fanboys cares enough about comics to "boycott" anything over them. If nobody's boycotting, then Disney isn't going to worry about it, because they DON'T have some overpowering agenda to make everything they produce family friendly. All you have to do is take a half-second look at Miramax or even ABC's output to know that.

feihong - 2009-09-02 @ 9:00 am

Actually, TheMan, Dimension films went with the Weinstein Corporation when they said their goodbyes to Disney, but I agree with you entirely.

In fact, Dimension Films is a great example of a successful imprint which Disney has bought and left alone to continue being successful. Nobody but the Dimension executives-the very same people who were in charge before Disney bought the company-have censored the Dimension pictures. Now, under Disney, Dimension has released films in the Highlander series, the Crow series, and the Scream series. They have released later Hellraiser films as well. They have produced Children of the Corn sequels and Robert Rodriguez movies since From Dusk Til Dawn-most of this time under the obviously unconcerned eye of the Disney Corporation.

All that time Dimension was successful as a producer and distributor of horror films and dark action pictures. They sold themselves as a company that produced gory, R-rated movies. Disney bought them and funded them and never batted an eye at the content of their product. The product sold, and that was all Disney cared about. Now if the product wasn't selling, as with what happened to Mirimax, then Disney stepped in and flexed their moneyed muscles. to take control of the company-but then it was about spending, and stockholder confidence. It wasn't about public image, no matter what you guys think.

It seems a lot of you are looking at the Disney Corporation-a conglomerate of businesses oriented primarily around-but not limited to-entertainment and merchandising-and instead seeing Walt Disney Pictures-a film company owned by the Disney Corporation and known the world over as "family-oriented" or "whitewashed" or "moralistic" or what have you. I have no problem with you not liking the film output of that production company-although I remember very fondly a number of Disney pictures I saw in my childhood: even though it's no longer very pc to say, I always greatly enjoyed The Jungle Book, Song of the South, The Aristocats and Lady and the Tramp. And certainly, Bambi was a very transporting early film experience for me, for the better or worse as far as my psyche is concerned. Whatever. This production company has a public image and they have used that public image for decades to help attract audiences and generate profits. Yes, folks; Disney's famous reputation is actually just about money, and I know it sounds obvious to say, but a lot of you seem to not be able to make the necessary connections here.

The Disney Corporation is a different entity. They have NO cultural agenda beyond making money, but Disney Corp makes money in a rather different way than Walt Disney Pictures; instead of making films they buy and sell production companies, merchandising rights and manufacturing concerns, build theme parks, etc. I know I'm putting this together in a way that isn't really fiscally exact, but I'm no businessman here-I'm like a guy playing one on TV. But you don't need to be a businessman to see that a corporation like this gets nowhere with a moral agenda-its existence is purely for profits, and the Disney Corporation is in that respect no different than any number of corporations out there, from Coca-Cola to Sony. They have not bought Marvel Comics because they think they can run it better than its current staff, or because they think that comics are out of control and morally wrong for showing drawings of decapitations and cigar smoking and stuff. They have bought Marvel Comics for profit, and profit alone; and Marvel Comics is profiting now from the giant success of their film arm. Marvel is making the movies that sell tickets right now-comic book movies are the highest priority at any of the major studios right now. They want to develop these properties, because people are coming to theaters and buying DVDs hand over fist. Disney Corporation previously had no resources to cater to this film market, so buying Marvel Comics would show investors and stockholders that they are serious about being competitive in the film market, and aiming at the most in-demand commodity in that market right now. Jmaq, I do agree that Disney is not likely to sell Marvel in the next few years if the Marvel films in production make money. However, if they bleed money in production and then comic book movies end up on the outs in popularity, then I could see Disney selling the company for precisely the same reason as they bought it: to make the stockholders happy.

It's a mistake to confuse Walt Disney Pictures and their public image with the Disney conglomerate at large. Walt Disney Pictures will not be absorbing or incorporating Marvel Comics into their company. They won't replace the Marvel execs with their own executives. the Disney Corporation has had no experience with comic book publishing in over 30 years, and they aren't about to throw their hat into the ring and boot out the Marvel brass. Most likely, the people at Marvel now will continue to run Marvel, and what will change is the money situation at the very top; Disney puts money in and pockets money coming back out. Disney will probably be more interested in the coming films, but they are unlikely to change anything about the pictures; Marvel movies so far have been cost-efficient and high-yielding, for the most part, and they have hits that count amongst the top-grossing movies out there right now. Disney wants a piece of that action, but they have no history of interfering in the day-to-day operation of their subsidiaries like Mirimax or Dimension. I doubt if the people brokering this deal on Disney's side are even aware there is an X-Force comic, and I doubt if they will be aware of it now that they own the company that makes it. Even if they do know of it, I don't really think they'll care, one way or the other. The blood in the comic is mostly jet black, anyway, and that gets you a PG-13 in Hollywood these days. They won't even care whether or not the book sells; that's going to be Marvel's concern, and it will only be Disney's concern if Marvel keeps the book running and losing money even though no one is reading it. Does that sound like Marvel to you?

I just don't think these gloom-and-doom rants have any actual precedent or basis in fact; in fact, they run contrary to the Disney Corporation's acquisition history. So all this whining is hardly worth it. A lot of you are sounding like the fat, nasally-voiced old dude at the comic book shop who stays there all the time but doesn't actually work there.

TheMan - 2009-09-02 @ 3:03 am

JESUS CHRIST!!!

Lets take a look at all the subsidiaries that disney owns and has neutered

!. miramax films

owns dimension and dimension extreme

produced the movies like kill bill, pulp fiction, reservoir dogs, no country for old men

2. Touchstone films

produced films like good morning vietnam and who framed roger rabbit

3. ABC

lets see scrubs, lost, greys anatomy

that is just three companies owned by disney and see how they have neutered them it is a business deal if marvel starts losing money they will sell them not start injecting micky mouse into the x-men. so get over it the worst that will happen is you will see more use of marvel on disneys tv networks, stores, and theme parks. and is that so bad.... you mean we get marvel themed rides at disneyland,, more marvel cartoons be it good or bad, and marvel merchandise at disney stores. that just sounds horrible.

SO USE SOME COMMON SENSE

if you making money dont change the business model.

P.s. i know my grammer sucks

Hydragoon24 - 2009-09-02 @ 2:24 am
With Disney owning ABC, I really hope we get live-action Marvel tv series.

NBC's HEROES has proven that a live-action X-Men series would work.

Of course, that would be a while with FOX's X-Men deal.

i think like a marvel tales series

with a new one hour like tale for a new hero every week

and it would return to some sometimes

and eventually it would build up to civil war or something

psychojr - 2009-09-02 @ 2:11 am

are there any proof that disney will ruin marvel? has disney ruined any company in the past?

I AM SCI-FI - 2009-09-02 @ 2:02 am

With Disney owning ABC, I really hope we get live-action Marvel tv series.

NBC's HEROES has proven that a live-action X-Men series would work.

Of course, that would be a while with FOX's X-Men deal.

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