Comcast to acquire maker of ‘Madagascar’
DreamWorks Animation goes for $3.8 billion
LOS ANGELES — Hollywood’s smallest publicly traded entertainment company, DreamWorks Animation, threw in the towel 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 purchase means greater competition for the Walt Disney Co., the world’s largest entertainment company. NBCUniversal plans to use DreamWorks Animation properties to bolster its fast-growing theme parks and move deeper into toys and children’s television.
DreamWorks is the film company behind the “Shrek,” “Madagascar” and “Kung Fu Panda” franchises.
The deal will pay DreamWorks Animation shareholders $41 a share in cash, more than 50 percent over its closing price Tuesday, when news of a possible deal emerged. Jeffrey Katzenberg, the founding chief executive of the studio, who is expected to reap nearly $400 million from the deal, will become a consultant to NBCUniversal and serve as chairman of a new entity called DreamWorks New Media.
Stephen 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.”
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. Katzenberg’s company, which has tried mightily to diversify away from movies, was ultimately unable to grow fast enough to survive alone.
The price secured by Katzenberg was greater than many people in Hollywood thought DreamWorks Animation was worth. It puts the company in the league of Marvel Entertainment and Lucasfilm, both of which were acquired by Disney for about $4 billion each.
For Comcast, the deal comes about a year after its $45.2 billion takeover of Time Warner Cable collapsed under regulatory pressure. The new deal, while significant, is relatively small for the cable and entertainment giant. It is about onetwelfth the size of Comcast’s failed bid for Time Warner Cable.
Comcast said that the takeover was subject to an antitrust review by the Department of Justice or the Federal Trade Commission but that it does not require approval by the Federal Communications Commission. The company expects the transaction to close by the end of 2016.