CHICAGO (MarketWatch) -- Walt Disney Co. said on Monday it has reached a deal to acquire comic book titan Marvel Entertainment Inc. for $4 billion in stock and cash, in a move that underscores the company's desire to have strong box-office franchises with appeal to families.
Marvel shares jumped 27% in early trading, to $48.88. Disney shares were down 1.3% at $26.49.
In a statement, Disney /quotes/comstock/13*!dis/quotes/nls/dis (DIS 26.37, -0.47, -1.75%) Chief Executive Bob Iger said "adding Marvel to Disney's unique portfolio of brands provides significant opportunities for long-term growth and value creation."
Marvel /quotes/comstock/13*!mvl/quotes/nls/mvl (MVL 48.85, +10.20, +26.39%) shareholders would receive a total of $30 per share in cash plus approximately 0.745 Disney shares for each Marvel share they own.
At closing, the amount of cash and stock will be adjusted if necessary so that the total value of the Disney stock issued as merger consideration based on its trading value at that time is not less than 40% of the total merger consideration.
Based on the closing price of Disney stock on Friday, August 28, the transaction value is $50 per Marvel share or approximately $4 billion.
Ike Perlmutter, Marvel's CEO, would continue to oversee the Marvel properties, and work directly with Disney executives to integrate them into Disney's businesses.
Under the deal, Disney will acquire ownership of Marvel including its more than 5,000 Marvel characters, including The Fantastic Four, Spider-Man, the X-Men, The Incredible Hulk and Iron Man, all of which have been turned into highly valuable feature film franchises.
The three "Spider-Man" films, released in 2002, 2004 and 2007, have generated $2.5 billion in worldwide box-office receipts. Four "X-Men" movies have grabbed about $1.6 billion in global box office.
In late July, following Disney's latest earnings report, Iger pointed to the value of making movies that can easily be watched several times, during an era when DVD rentals are rising in popularity while DVD sales are in decline.
"If you want to watch a Pixar film, or you want your kids to watch it 50 times ... then owning it becomes a lot more convenient and more valuable than renting it," Iger told analysts during a conference call. " ... The notion that there's a market for everything isn't necessarily the case anymore. "It has to be good, and the price-to-value relationship has to be really high."
Disney acquired Pixar Animation Studios in 2006.
Several studios, including those owned by Time Warner Inc. /quotes/comstock/13*!twx/quotes/nls/twx (TWX 28.07, -0.27, -0.94%) and Viacom Inc. /quotes/comstock/13*!via.b (VIA .B 25.13, +0.01, +0.05%) /quotes/comstock/13*!via/quotes/nls/via (VIA 26.48, -0.01, -0.04%) , have pointed out that while overall DVD sales are down in recent years, the biggest blockbusters - or so-called "tentpole" releases, are still doing well.
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