Disney Completes Marvel Acquisition - Update

Thursday, Walt Disney Co. (DIS) said that it has completed its acquisition of renowned character franchise company, Marvel Entertainment Inc. (MVL). Under the terms of the agreement and based on the closing price of Disney on December 31, Marvel shareholders will receive a total of $30 a share in cash plus approximately 0.7452 Disney shares for each Marvel share they own.

Robert Iger, Disney's president and chief executive officer said, "We believe the creative and business potential of this combination is substantial and can help us grow both our top and bottom line, leading to a significant increase in long-term shareholder value."

In August, Burbank, California-based Walt Disney said that it has agreed to acquire Marvel in a cash and stock transaction. The boards of directors of both Disney and Marvel had approved the transaction, which was also later cleared by antitrust authorities and Marvel shareholders.

With the deal, Disney will acquire ownership of over 5,000 Marvel comic-book characters featured in a variety of media over 70 years and businesses, including licensing, movie production and publishing. Marvel, which rivaled Disney during the 1960's and 1970's, sells about 50 million comic books a year.

In mid-November, Disney said that its fourth-quarter profit rose 18% from last year, helped mainly by strong results at its cable networks and, to a lesser extent, the worldwide Disney Channels. The company reported net income for the fourth quarter of $895 million or $0.47 per share, compared to $760 million or $0.40 per share for the year-ago quarter. Revenue for the fourth quarter increased 4% to $9.87 billion from $9.45 billion in the same quarter last year.

However, Marvel in early November reported a large drop in profit for the third quarter, hurt by a decline in feature film activity and related licensing. The company's net income for the third quarter was $20.42 million or $0.26 per share, sharply lower than $50.63 million or $0.64 per share in the prior-year quarter. Net sales for the quarter dropped to $105.66 million from $182.50 million in the same period last year.

DIS closed Thursday's last trade on the New York Stock Exchange at $32.25, down $0.03 or 0.09%. MVL closed Thursday's last trade on the New York Stock Exchange at $54.08, up $0.03 or 0.06%.

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