On Aug 31, 2009, Walt Disney Company (DIS) announced a strategic deal to acquire Marvel Entertainment Inc. (MVL) in a cash and stock deal for approximately $4 billion. Marvel shareholders would receive in aggregate $30 per share in cash and approximately 0.745 Disney stock for each Marvel stock they own.
The purchase of Marvel Entertainment is set to be Disney’s largest acquisition since 2006, when it had purchased Pixar Animation Studios for $7.4 billion. The deal is expected to close by the end of the year.
The deal entitles Walt Disney to Marvel’s strong global brand and world-renowned library of more than 5,000 characters, which include Iron Man, Spider-Man, X-Men, The Incredible Hulk, The First Avenger: Captain America, Fantastic Four and Thor. The deal also provides Disney exclusive control over Marvel’s licensing, publishing and film production divisions.
On Sep 8, 2009, Disney announced another acquisition in the video game business. The company’s interactive entertainment affiliate, Disney Interactive Media Group, reached an agreement to acquire the Chicago-based videogame manufacturer Wideload Games Inc. Terms of the agreement were not disclosed.
Disney Interactive Studios develops and distributes a wide range of multi-platform video games, mobile games and interactive entertainment globally. The acquisition of Wideload Games will help enhance its market share in the video game industry. Wideload Games is currently developing a family console game scheduled for release in 2010 from Disney.
Media and Entertainment businesses are facing a slump in advertising demand as well as DVD sales, so they are venturing into the video game business, which has more growth potential. However, the video game industry, which has surged for a number of years, has finally been affected by the recession.
Nevertheless, we are of the view that the video game industry will regain its lost momentum once the economy rebounds.
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