Disney to acquire Comcast's remaining 33% stake in Hulu for a minimum of $8.6 billion

In an important move to solidify its position in the global streaming service arena, The Walt Disney Company officially initiated the acquisition process of Comcast's one-third stake in Hulu on Wednesday, 1 November, 2023. This deal, when finalized, will grant Disney complete control of the popular streaming platform, paving the way for integration into the Disney+ service.

Disney has revealed its intention to transfer approximately $8.61 billion to Comcast's parent company, NBCUniversal (NBCU), by 1 December, 2023. This payment represents NBCU's share of the $27.5 billion guaranteed floor value established when it agreed to divest its stake in Disney back in 2019. The $8.61 billion figure takes into account the anticipated outstanding capital call contributions payable by NBCU to Disney.

Disney's journey to acquiring a controlling interest in Hulu was set in motion by its $71 billion acquisition of 21st Century Fox's film and television assets. This acquisition gave Disney a strong competitive edge in the ongoing streaming wars, allowing it to assert its dominance in the industry.

Disney's Chief Executive, Bob Iger, had previously revealed plans to make extensive Hulu content available to a group of subscribers. This strategic move aims to create a unified streaming experience for U.S. viewers by merging the general entertainment content of Hulu with content from Disney's various brands and franchises.

In a separate development, Comcast's CEO, Brian Roberts, lauded Hulu as a "scarce kingmaker asset," underscoring its increased value compared to when the initial deal was struck.

As of Disney's third quarter report, Hulu boasted 48.3 million subscribers, surpassing Comcast's Peacock streaming service, which had 28 million paid subscribers. Disney+, Disney's flagship streaming service, reported a staggering 146.1 million global subscribers at the same quarter's close.

Disney enters this significant transaction with a robust financial position, holding over $11 billion in cash on its balance sheet.

The evaluation of Hulu's equity fair value will be conducted as of 30 September, 2023, as outlined in the agreed terms. In the event that the assessed value exceeds the guaranteed floor value, Disney will be obligated to pay NBCU the difference.

A team of bankers, representing both parties, will be responsible for determining Hulu's fair market value in accordance with regulatory filings. While the exact timing of the appraisal process remains uncertain, Disney anticipates its completion sometime in 2024.