Walt Disney Co said on Monday it plans to buy Marvel Entertainment Inc for $4 billion in a deal that would add characters like Iron Man, Spider-Man and the Fantastic Four to its entertainment empire.
Disney is striking the biggest media deal of the year so far -- one that will unite the Incredible Hulk and Mickey Mouse -- at a time when the media business is struggling to cope with spending cutbacks by both consumers and advertisers.
Marvel, however, has a stable of wildly popular characters that it has brought to the big screen in home-run films like Iron Man. A sequel, Iron Man 2 is due to hit the theaters next year, while Thor, Spider-Man 4 and the first Avenger movie are slated for a 2011 release.
For Disney, movies like those should help address a key area of concern among investors: How it can better reach more young males.
Indeed, Disney has long been a blockbuster brand with girls thanks to characters like Hannah Montana, Cinderella and Snow White, but has struggled to achieve the same kind of success with boys.
To do so, Disney agreed to pay $50 per share in cash and stock for Marvel, a premium of 29 percent to Marvel's closing stock price of $38.65 on Friday. The deal has been approved by the boards of both companies.
Marvel's shares shot up to $48.85 in early trade.
Shares of Disney, which will acquire ownership more than 5,000 Marvel characters, dropped about 1.7 percent in early trade. The company's finance chief said the deal should close by year-end.
Marvel shareholders would receive a total of $30 per share in cash plus approximately 0.745 Disney shares for each Marvel share they own.
(Marvel shareholders are) getting a good deal in my opinion, said Arvind Bhatia, an analyst with Sterne, Agee & Leach.