DreamWorks Animation Acquired by NBCUniversal

The Hollywood Reporter has reported that Universal Filmed Entertainment Group (Universal Pictures, Fandango, and NBCUniversal Brand Development) is set to acquire DreamWorks Animation.  The deal brings DreamWorks properties like Shrek, Madagascar, Kung Fu Panda and How to Train Your Dragon into the Universal fold as well as DreamWorks Classic characters such as Where’s Waldo and Rudolph the Red-Nosed Reindeer.  For more specifics on the deal and statements from representatives from both parties, read on below.

Steve Burke, CEO of NBCUniversal, provided the following statement about the acquisition (via THR):

“DreamWorks Animation is a great addition to NBCUniversal.  Jeffrey Katzenberg and the DreamWorks organization have created a dynamic film brand and a deep library of intellectual property. DreamWorks will help us grow our film, television, theme parks and consumer products businesses for years to come. We have enjoyed extraordinary success over the last six years in animation with the emergence of Illumination Entertainment and its brilliant team at Illumination Mac Guff studio. The prospects for our future together are tremendous.”

“Five years ago, we had one franchise,” namely Fast and Furious, but “today, we have eight franchises, and we are hard at work trying to build more.” He added that “we spend a lot of time trying to figure out where films are in the arc of their franchise.”

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DreamWorks founder and CEO Jeffrey Katzenberg will no longer be at the helm of Dreamworks moving forward.  As part of the deal he will become the chairman of DreamWorks New media, which consists of Awesomeness TV and NOVA, as well as serving as a consultant with NBCUniversal.  He is also entitled to a payout of approximately $21.9 million.  Illumination Entertainment founder Chris Meledandri (behind the Despicable Me/Minions franchise) will now take the lead in managing the DreamWorks Animation properties moving forward.  Katzenberg made the following statement:

“Having spent the past two decades working together with our team to build DreamWorks Animation into one of the world’s most beloved brands, I am proud to say that NBCUniversal is the perfect home for our company; a home that will embrace the legacy of our storytelling and grow our businesses to their fullest potential.

[The deal] not only delivers significant value for our shareholders, but also supports NBCUniversal’s growing family entertainment business.”

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This is a huge acquisition for NBCUniversal, who will possess a formidable family-friendly portfolio.  The deal has not been finalized as of yet, but is expected to by the close of this year.  The specifics of the deal and what is required to close the transaction are as follows:

“Under terms of the acquisition, DreamWorks Animation shareholders will receive $41 per share in cash. The companies said that this “implies a $3.8 billion equity value based on a fully-diluted share count.” In a regulatory filing, Comcast said the price also implies “a $4.1 billion enterprise value, inclusive of the assumption of debt.”

The deal is expected to close by the end of 2016. If it fails to get regulatory approval, DWA is entitled to a $200 million break-up fee, according to a regulatory filing.

What approvals are required to close the transaction? “The Department of Justice and Federal Trade Commission will need to determine between themselves as to which agency reviews the transaction from an antitrust perspective,” Comcast said. “This transaction does not require FCC approval. In addition to the U.S., merger control filings will also be required in certain foreign jurisdictions. The agreement has been approved by the boards of directors of DreamWorks Animation and Comcast, and the controlling shareholder of DreamWorks Animation has approved the agreement by written consent.”

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