Comcast to buy DreamWorks Animation for $3.8 billion

Thu Apr 28, 2016 7:29pm EDT
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By Liana B. Baker and Rishika Sadam

(Reuters) - Comcast Corp, the owner of NBCUniversal, said on Thursday it would buy Hollywood studio DreamWorks Animation SKG Inc for $3.8 billion to boost its family-friendly offerings and help it take on media conglomerate Walt Disney. The acquisition will add major children's franchises to Universal's film library such as "Shrek," "How to Train Your Dragon" and "Kung Fu Panda," which it could tap for its growing theme parks and consumer products businesses.

Comcast's Universal Pictures found success with blockbuster family films like "Despicable Me" and "Minions," but this deal will ramp up its portfolio.

DreamWorks' burgeoning TV business will also be a boon to Universal, Wall Street analysts said. DreamWorks provides original programming to streaming service Netflix and other digital platforms that are eager for content as TV viewership rapidly moves online.

"It’s a sensible strategy," MoffettNathanson analyst Craig Moffett said. "They are buying characters."

In addition to brands it created, like "Shrek," DreamWorks owns rights to iconic characters such as Lassie and Casper the Friendly Ghost that it acquired in its 2012 purchase of Classic Media.

"There's a lot of opportunity for them to create interesting content out of those brands and monetize them," Moffett said.

Comcast, the largest cable distributor in the United States, has steadily boosted its ownership of content and invested in expanding its theme parks business, positioning itself as a diversified conglomerate to rival Disney.

The $41-per-share cash offer represents a premium of about 27 percent to DreamWorks' Wednesday close.   Continued...

Jeffrey Katzenberg, CEO of Dreamworks Animation, speaks at the 2014 Milken Institute Global Conference in Beverly Hills, California April 28, 2014. REUTERS/Lucy Nicholson