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Comcast ( CMCSA ) on Thursday agreed to buy movie studio DreamWorks Animation ( DWA ) for $3.8 billion in cash, or $41 per share, adding to its NBCU Universal media and entertainment properties. DreamWorks Animation stockholders will receive $41 in cash per share. DreamWorks stock spiked on Wednesday after multiple reports of Comcast’s interest surfaced. The deal will boost Comcast-NBCU’s presence in China. Comcast will also retain control of DreamWorks’ AwesomenessTV, which develops short-form video for millennials, those ages 18 to 34. Verizon Communications and Hearst in early April acquired a 24.5% stake in AwesomenessTV for $159 million. DreamWorks CEO and co-founder Jeffrey Katzenberg will become chairman of DreamWorks New Media, which will include Awesomeness TV and Nova, a 3D visualization technology startup. The acquisition is expected to close by year-end, said Comcast. Comcast stock was up a fraction in the stock market today , near 61.50. DreamWorks stock was up 24%, near 40. “The biggest reason (for Comcast) to buy DreanWorks is to secure content supply,” said Evan Wingren, an analyst at Pacific Crest Securities, in a research report. “Comcast has a dominant position in live video distribution, but has fallen behind Netflix ( NFLX ) and Amazon ( AMZN ) in on-demand. By securing a pipeline of children’s television content and library films, it could bolsters its on-demand catalog in an effort to compete with Netflix.” DreamWorks has developed TV shows for Netflix and Amazon.com’s Prime streaming service. Comcast acquired NBCU from General Electric ( GE ) in 2011. Aside from Universal Films, Comcast owns Focus Features and Illumination Entertainment, the latter of which developed the “Minions” movies. DreamWorks’ most popular movie franchises include “Shrek,” “Madagascar,” “Kung Fu Panda ” and “ How to Train Your Dragon.” There’s optimism, analysts say, for the upcoming “Despicable Me 3” and “The Secret Life of Pets.” Theme parks have become a key part of Comcast’s overall growth. In a research note, Bryan Kraft, an analyst at Deutsche Bank, said the Dreamworks acquisition “expands NBCU into animation in a more meaningful way, increases the intellectual property pipeline for theme parks and consumer products, and increases Universal Studios’ exposure to tent pole global film franchises. It also diversifies Comcast away from a more mature U.S. media/television industry.” Comcast-NBCU is building a $3.3 billion theme park in Beijing with local investors. It’s slated to open in 2019. The Oriental DreamWorks movie studio, meanwhile, is building a headquarters and entertainment center in Shanghai with local partners. Scalper1 News
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