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Disney to buy Marvel Entertainment for 4B ! (Read more)

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Disney to buy Marvel Entertainment for 4B !

Walt Disney Company said Monday it had agreed to buy Marvel Entertainment, the company that owns the rights to such popular characters as Spider-Man and the Fantastic Four, in a cash and stock deal it valued at $4 billion. The deal, which boards of directors at both companies have approved, comes more than 10 years after Marvel was at the center of a bitter takeover battle between two feisty financiers.

"We believe that adding Marvel to Disney's unique portfolio of brands provides significant opportunities for long-term growth and value creation," Robert A. Iger, Disney's chief executive, said in a statement announcing the deal.

"Disney is the perfect home for Marvel's fantastic library of characters given its proven ability to expand content creation and licensing businesses," said Ike Perlmutter, Marvel's chief executive officer. "This is an unparalleled opportunity for Marvel to build upon its vibrant brand and character properties by accessing Disney's tremendous global organization and infrastructure around the world."

Under the terms of the deal, Disney will pay $30 a share in cash and 0.745 Disney shares for every Marvel share, with Disney stock accounting for no less than 40 percent of the deal value. Disney valued the deal at $50 per Marvel share, based on the companies' closing share prices on Friday.

Shareholders at Marvel will need to approve the transaction.

Marvel Entertainment began in 1939 as a comic book company called Timely Publications. It has since become one of the largest character-based franchises in the world, with a proprietary library of over 5,000 characters including The Incredible Hulk, Captain America, The Avengers and the X-Men.

Ronald O. Perelman acquired Marvel in 1989, but the company filed for bankruptcy protection seven years later, setting off a drawn-out takeover feud between him and a group of bondholders led by Carl C. Icahn. In the end, Mr. Perlmutter gained control of Marvel through his company, Toy Biz, and Mr. Perlmutter owns about 37 percent of Marvel's stock, according to Marvel's latest annual filing with regulators.

Mr. Perlmutter will continue to oversee the Marvel properties after the acquisition, Disney said.

Marvel now has three main divisions: a licensing arm, which sells the right for other companies to use their proprietary characters in movies and promotions; a publishing arm, which makes the comics and books based on their characters; and a film production unit, which makes movies for some of their characters.

The film production unit is a relatively new venture for Marvel. The company originally licensed its characters to the big movie studios, but beginning in 2005, Marvel entered the movie-making business with the construction of a $525 million film facility.

The first two movies Marvel produced were "Iron Man" and "The Incredible Hulk" in the summer of 2008. The company is currently developing four films for release in 2010 and 2011: "Iron Man 2," "Thor," "The First Avenger: Captain America" and "The Avengers."

Marvel was advised by Bank of America Merrill Lynch in Monday's transaction.

The acquisition comes as Disney, with its vast theme park operations and television advertising business, has been struggling because soft advertising sales at ABC and ESPN and drooping consumer spending at Disney World. Disney's profit in the third quarter dropped 26 percent.

Over all, Disney's net income fell to $954 million, or 51 cents a share, from $1.28 billion, or 66 cents a share, in the year-ago period. Revenue fell 7 percent, to $8.6 billion. Earnings per share for the current quarter included a one-cent restructuring charge related to an accounting gain. Excluding that charge, Disney narrowly beat Wall Street's expectations.

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