Comcast Corp is in talks to buy the Hollywood studio owner DreamWorks Animation SKG Inc for more than $3 billion. The people familiar with the matter even revealed that the deal could make the U.S. cable giant a rival to Walt Disney Co in the entertainment industry.
According to THE WALL STREET JOURNAL, Comcast's Universal Pictures studio has already took pleasure in the success with its animated "Despicable Me" and "Minions" movies. However, it is still considered to be a relatively small player in the entertainment business.
However, its parent company has been moving aggressively to copy Walt Disney Co by using its animation properties to create its consumer products and theme parks businesses. This is allegedly a strategy that could be boosted up by the addition of DreamWorks, which created "Shrek," "Kung Fu Panda" and "Madagascar" movies, among others.
The animation company sources also confirmed to The Hollywood Reported that it is in talks with Comcast to be sold for more than $3 billion. The potential purchase of the company would make DreamWorks Animation into one of the largest entertainment companies that control key properties. These entertainment conglomerates include NBC, Telemundo, the USA network, and Universal Studios.
The settlement would also provide Jeffrey Katzenberg, the CEO of the animation company, with a strong buyer after years of searching. In fact, in November, the CEO held advanced talks with toymaker Hasbro about a potential partnership.
This was after months of earlier discussions with Japanese telecommunications giant SoftBank. The company also has courted every other company, including 20th Century Fox and other Chinese companies.
More recently, sources from the company stated that the Glendale-based company has held discussions with potential buyers in China. DreamWorks Animation was spun off from DreamWorks Studios in 2004 as a separate listed company, as mentioned by Reuters.
Moreover, Dreamworks, which is in the midst of the spin, has been reducing its dependence on the unpredictable feature films business. This would enable the company to concentrate on increasing the revenue from licensing its original content to media houses and video-streaming companies like Netflix Inc and Verizon Communications Inc's Go90.
Meanwhile, the shares of DreamWorks, which has a market cap of $2.35 billion, closed at $27.12 on Tuesday. On the other hand, Comcast ended at $61.05.
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