Comcast’s NBCUniversal has confirmed it has lined up a $3.8bn (£2.6bn) deal to buy DreamWorks Animation, maker of hits from Shrek to Kung Fu Panda, to create a formidable rival to Disney.
The deal will see DreamWorks Animation come under the same roof as NBCUniversal-owned Illumination Entertainment, maker of the hugely profitable including Despicable Me and spin-off Minions, creating an animation studio to challenge Disney and its Pixar operation.
Pixar’s impressive range of animated hits include Toy Story, Finding Nemo, Cars, The Incredibles and Inside Out.
The deal, a healthy premium on DreamWorks Animation’s $2.3bn stock market valuation, is expected to close by the end of the year subject to clearance by competition regulators.
“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,” said Jeffrey Katzenberg, chief executive and co-founder of DreamWorks Animation. “A home that will embrace the legacy of our storytelling and grow our businesses to their fullest potential.”
DreamWorks Animation spun off in 2004 from DreamWorks SKG, an entertainment company founded in 1994 by Katzenberg. Steven Spielberg and David Geffen.
Katzenberg, who controls controls 60% of the animation company’s voting stock, will become the chairman of a newly formed entity at NBCUniversal called DreamWorks New Media.
The operation will also comprise DreamWorks Animation’s interest in Nova and its 51% stake in Awesomeness TV, which AOL-owner Verizon recently acquired a 24.5% shareholding valuing the digital entertainment network at $650m.
Katzenberg will also serve as a consultant to Comcast-owned NBCUniversal.
The deal will also see NBCUniversal take over DreamWorks Classics, the library of classic characters including Where’s Waldo and Rudolph the Red-Nosed Reindeer, and a consumer products business.
“DreamWorks Animation is a great addition to NBCUniversal,” said Steve Burke, chief executive of NBCUniversal. “DreamWorks will help us grow our film, television, theme parks and consumer products businesses for years to come.”
NBCUniversal said that Chris Meledandri, the founder of Illumination Entertainment, would “help guide the growth” of DreamWorks Animation indicating that Katazenberg has agreed to hand the reins of his company in the neat future.
“Jeffrey Katzenberg and the DreamWorks organisation have created a dynamic film brand and a deep library of intellectual property,” said Burke. “We have enjoyed extraordinary success over the last six years in animation with the emergence of Illumination Entertainment. The prospects for our future together are tremendous.”
