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Disney to buy Marvel for $4 billion

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Disney to buy comic book powerhouse Marvel for $4B

LOS ANGELES – The Walt Disney Co. is buying Marvel Entertainment Inc. for $4 billion in cash and stock, bringing such characters as Iron Man and Spider-Man into the family of Mickey Mouse and WALL-E.

Under the deal, which was announced Monday and is expected to close by the end of the year, Disney will acquire the rights to 5,000 Marvel characters. Many of them, including the Fantastic Four and the X-Men, were co-created by the comic book legend Stan Lee.

Disney CEO Robert Iger said Marvel's comic books, TV shows, movies and video games amounted to "a treasure trove of content." Iger said the deal would bring benefits like the ones Disney got from buying "Toy Story" creator Pixar Animation Studios Inc. for $7.4 billion in stock in 2006.

"The acquisition of Marvel offers us a similar opportunity to advance our strategy," Iger said, and "to build a business that is stronger than the sum of its parts."

For Marvel, Iger said being in the Disney camp would mean better global distribution and better relationships with retailers to sell its products. Another storied comic book maker, DC Comics, has been under the wings of a major studio since 1969, when Warner Bros. bought the home of Superman, Batman and Wonder Woman.

Marvel Chairman Mort Handel called Disney "a perfect home for our great collection of characters."

One point of the deal is to help Disney appeal to young men who have flocked to theaters to see Marvel superheroes such as Iron Man in recent years. That contrasts with Disney's recent successes among young women with such fare as "Hannah Montana" and the Jonas Brothers.

Marvel television shows also already account for 20 hours per week of programming on Disney's recently rebranded, boy-focused cable network, Disney XD, and that looks likely to increase, Iger said. The shows are "right in the wheelhouse for boys," he said.

However, analyst David Joyce of Miller Tabak & Co. noted that that the $4 billion offer was at "full price."

Marvel shareholders will receive $30 per share in cash, plus 0.745 Disney shares for every Marvel share they own. That values each Marvel share at $50 based on Friday's closing stock prices.

Marvel shares shot up $9.91, or 26 percent, to $48.56 in midday trading Monday. Disney shares fell 82 cents, or 3 percent, to $26.02.

Disney said the boards of both companies have approved the transaction, but it will require an antitrust review and the approval of Marvel shareholders.

Although it began producing its own movies, starting with "Iron Man" last year, Marvel has several deals with other movie studios that Disney said it will honor and re-examine upon expiration.

For example, "Spider-Man 4," set for release in 2011, is being made with Sony Corp.'s Columbia Pictures; "Iron Man 2" will be distributed by Viacom Inc.'s Paramount Pictures next year; and the upcoming "X-Men Origins: Magneto" and "X-Men Origins: Wolverine 2," both due in 2011, are to be distributed by News Corp.'s 20th Century Fox.

Iger said Pixar also had third-party licensing agreements that eventually expired, allowing the companies to move forward together.

Marvel earned a net profit of $206 million in its last fiscal year, up 47 percent from a year earlier, on revenue of $676 million.

Disney said the acquisition will hurt its earnings per share by a mid-single digit percentage in fiscal 2010 but be positive in 2012. That is partly because the company will issue 59 million new shares and partly because of the timing of Marvel releases such as "Thor" and "The First Avenger: Captain America" in 2011.

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Marvel/Disney Crossovers We're Looking Forward To

Mary Poppins vs. Dr. Strange: The Cloak of the Vishanti vs. A Spoonful of Sugar! The Faltine dimension vs. the racetrack full of penguins! “Abracadabra” vs. “Supercalifragilisticexpialadocious”!

Spider-Man vs. Jiminy Cricket: Seized by arachnid instinct, the way-out web-slinger craves cricket meat! Will an enchanted umbrella be enough to shock him back to his spider-senses?

Hercules vs Hercules: The battle the public domain laws demanded! Not a dream! Not a hoax! Not covered under the Sonny Bono Copyright Term Extension Act!

Br’er Rabbit vs. Cyclops: Two brilliant tactical minds, fighting for the future of their outcast friends! They’re ready for anything – are you?

Power Man vs. Uncle Remus: The righteous fists of Luke Cage stand ready to drop a slaveship’s worth of pain on The Man’s favorite sharecropper – until a wise bluebird reminds him that we’re all brothers under the skin.

Black Panther vs. The Lion King: When Wakanda goes to war with the Pride Lands, only one big cat can be left standing in the circle of death! The two-pawed battle epic that shook a continent!

Galactus vs. Pocahontas: She laid her head down on the soil – and a doomed world was saved! But can she lead her new master on a journey that turns his hunger… into love?

Colossus vs. Pinocchio: The building materials who walk like men! Who will triumph: Italian wood… or Russian steel? There’s no flesh in this supersaga – but plenty of blood!

Esmerelda vs MODOK: Can a hideous creature designed only for killing discover the beauty in himself through the love of a gypsy girl designed only for compassion?

The 7 Dwarves vs. The Fantastic Four: When the last surviving members of a race of woodland demi-humans hold a naive princess hostage, the original super-team springs into action! Whistle while you clobber!

The Hound from The Fox and the Hound vs. Rachel Summers from Days of Future Past: “Turn in your best friend,” the humans said! “You have no choice!” As you cry in your cage at night, can anyone truly know the depths of your loneliness?

Wolverine vs. Tramp: One is a scruffy loner with heroic instincts and a heart of gold! The other has giant adamantium claws! Who will win the good girl’s heart?

Bambi’s Mother vs Uncle Ben: “With great power comes great responsibility” – or, “If you’d just been a better kid, I’d still be alive.” The neuroses of tomorrow begin here!

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