Summary
In a surprising deal the Walt Disney Company agrees to acquire Marvel Entertainment for a hopping $4 billion in a cash and stock transaction.
Analysis
The Walt Disney Company's pending acquisition of Marvel Entertainment is the first "big" deal in the media industries in some time, and it comes when many have written off "traditional" media's future.
The news is well documented--Marvel's family of super-heros which this analyst fondly grew up with during the 1960s will now be part of the Disney family, but most importantly, will provide a huge amount of both existing and potential content for television, movies, DVD sales, merchandise, and hey, why not--even some new rides at Disney's theme parks.
The price seems high, and as one analyst quoted in this article states is that "Disney is the only company that could do this deal." It also continues the signal that Disney under Bob Iger is very different from the company headed by Micheal Eisner.
But will this acquisition provide a significant boost to Disney's earnings and long-term growth prospects? Marvel had ran though many of its super-heros already, and the last two entrants of "Wolverine" and the "Watchmen" made money, but nothing to the tune of the Spider-Man or X-Men franchises. A new Iron Man sequel and a much anticipated "Captain America" and "Thor" are supposedly on the way, but movie audiences may be tiring of the super-hero genre.
Still, this is an exciting acquisition with a great deal of potential. Now it is up to Iger and team to make this all work.
Alan Albarran consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
