Comcast to buy Hollywood studio DreamWorks for $3.8 bn
29 April 2016
Comcast Corp, the largest cable operator in the US, yesterday struck a deal to buy Hollywood studio owner DreamWorks Animation SKG Inc for $3.8 billion
Comcast, the owner of NBCUniversal, will pay $41-per-share in cash, a premium of about 27 per cent to DreamWorks' closing price on Wednesday.
The deal would see the merger of DreamWorks Animation with Comcast's Universal Filmed Entertainment Group, which includes Universal Pictures, Fandango, and NBCUniversal Brand Development.
The transaction includes Comcast paying $200 million as reverse breakup fee to DreamWorks if regulators do not approve the deal.
Founded in 1994 by director and producer Steven Spielberg, music executive David Geffen, and former Disney executive Jeffrey Katzenberg, California-based DreamWorks creates family entertainment, including computer-generated animated feature films, television specials and series and live entertainment properties.
In 2004, DreamWorks produced Shrek 2, the third-highest revenue-grossing movie of all time.
The company has theatrically released a total of 22 animated feature films, including the franchise properties of Madagascar, Kung Fu Panda and How to Train Your Dragon. It also owns rights to iconic characters such as Lassie and Casper the Friendly Ghost.
In 2008, Reliance-Anil Dhirubhai Ambani Group firm Reliance Entertainment agreed to provide DreamWorks a total of $1.2 billion funding.
DreamWorks has not been profitable since the past two years. It lost $54.8 million last year and $309.6 million in 2014
Comcast is a global media and technology company with two primary businesses, Comcast Cable and NBC Universal.
It is one of the largest video, high-speed internet and phone providers in the US to residential customers under the XFINITY brand and also provides these services to businesses.
NBC Universal operates news, entertainment and sports cable networks, the NBC and Telemundo broadcast networks, television production operations, television station groups, Universal Pictures and Universal Parks and Resorts.