WALT Disney agreed to buy Marvel Entertainment overnight for $US4 billion ($4.7 billion) in the biggest media deal of the year, banking on Marvel's roster of superheroes to broaden its lineup of movie franchises that appeal to boys.
Disney adds Iron Man, Incredible Hulk and Thor to its roster of lovable characters like Mickey Mouse and Snow White, and will feature the comic book heroes in movies before rolling out associated theme park rides, TV shows and merchandise.
But the deal comes at a tough time in the entertainment business, with advertisers avoiding spending on new campaigns and consumers cutting back on everything from DVDs to travel.
The deal is also expensive. The price tag values Marvel at 37 times its estimated 2009 earnings, and offers shareholders a 29 per cent premium to Friday's closing price. Standard & Poor's reacted by placing Disney's credit rating on its negative watchlist.
But the risk of overpaying did not deter Disney from seeking out a deal to address an area of concern among investors: How can it better reach more young males.
"This helps give Disney more important exposure to the young male demographic that they have sort of lost some ground with in recent years," said David Joyce, an analyst with Miller Tabak & Co.
Indeed, Disney has long been a blockbuster brand with girls thanks to characters such as Hannah Montana, Cinderella and Snow White, but has struggled to achieve the same kind of success with boys.
Movies including Iron Man 2, due to hit theaters next year, or 2011's Spider-Man 4 and Avengers should help resolve that issue.
Disney will also be able to use its marketing and entertainment strength - stretching from ABC to cable television to theme parks - to promote and build characters such as Thor in ways Marvel never could.
The deal is Disney's largest since the $US7.6 billion purchase of Pixar in 2006, and it immediately caused reverberations. Shares in DreamWorks Animation SKG Inc spiked 5 per cent on speculation it may become a takeover target.
And analysts raised questions about companies like Viacom, Discovery Communications, and Hasbro Inc that have existing business partnerships with Marvel.
To acquire Marvel, Disney agreed to pay a total of $US30 per share in cash plus about 0.745 Disney shares for each Marvel share owned. The deal was approved by the boards of both companies.
The shares of Marvel, which was founded in 1939 and rolled out its first blockbuster character, Captain America, in 1941, shot up to a high of $US49.29 before falling a bit to close at $US48.37 on the New York Stock Exchange.
Im worried bout Marvel now...... Why Would they Sell out to Disney?!
.....Welp im all for Spider-Man Appering in the next KH game