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DreamWorks Animation Is Bought by Comcast in $3.8 Billion Deal DreamWorks Animation Is Bought by Comcast in $3.8 Billion Deal
(35 minutes later)
Comcast is buying DreamWorks Animation in a $3.8 billion acquisition deal that will bolster an entertainment business that includes film, television and theme parks. LOS ANGELES — Hollywood’s smallest publicly traded entertainment company, DreamWorks Animation, threw in the towel on Thursday after a turbulent 12 years, agreeing to sell itself to Comcast’s sprawling NBCUniversal in a deal valued at a hefty $3.8 billion.
The deal, announced Thursday morning, will pay DreamWorks Animation shareholders $41 a share in cash, more than 50 percent over its close. The purchase means greater competition for the Walt Disney Company, the world’s largest entertainment company. NBCUniversal plans to use DreamWorks Animation properties, which include “Kung Fu Panda,” “How to Train Your Dragon” and “Shrek,” to bolster its fast-growing theme parks and move deeper into toys and children’s television.
The boutique studio, run by Jeffrey Katzenberg, will become part of the filmed entertainment group of NBCUniversal, which is owned by Comcast. The deal will pay DreamWorks Animation shareholders $41 a share in cash, more than 50 percent over its closing price on Tuesday, when news of a possible deal emerged.
Last year, Comcast’s $45.2 billion proposed takeover of Time Warner Cable collapsed under regulatory pressure. This new deal represents a push to expand its entertainment portfolio. Stephen B. Burke, NBCUniversal’s chief executive and senior vice president of Comcast, in a statement cited DreamWorks Animation’s “dynamic film brand and deep library of intellectual property” as reasons for the deal. “DreamWorks will help us grow our film, television, theme parks and consumer products businesses for years to come.”
“DreamWorks Animation is a great addition to NBCUniversal,” said Stephen B. Burke, NBCUniversal’s chief executive and senior vice president of Comcast. “Jeffrey Katzenberg and the DreamWorks organization have created a dynamic film brand and a deep library of intellectual property. DreamWorks will help us grow our film, television, theme parks and consumer products businesses for years to come.” Mr. Burke said Chris Meledandri, the chief executive of Illumination, Universal’s animation division, would oversee the DreamWorks Animation business. Jeffrey Katzenberg, the founding chief executive of the studio, who will personally reap tens of millions of dollars from the deal, will become a consultant to NBCUniversal and serve as chairman of a new entity called DreamWorks New Media. It will be made up of assets like AwesomenessTV, a digital network and studio aimed at teenage girls.
The end of the road for DreamWorks Animation as an independent company reflects an increasingly consolidated Hollywood. To survive, companies have come to rely on interconnected, franchise-oriented businesses – with television, consumer products and theme parks typically more lucrative than film. Mr. Katzenberg’s company, which has tried mightily to diversify away from movies, was ultimately unable to grow fast enough to survive alone.
In recent years, Mr. Katzenberg has pursued sales and mergers with multiple studios, to no avail. A possible acquisition by SoftBank, the Japanese telecommunications giant, went nowhere in 2014. The was also a failed effort to tie up with Hasbro.