Comcast buys DWA for $3.8bn

US media giant Comcast, owner of NBCUniversal, has agreed to acquire CGI studio DreamWorks Animation (DWA) for US$3.8bn.

Jeffrey Katzenberg

Under the deal, which was mooted earlier this week, DWA will become part of the Universal Filmed Entertainment Group, which includes Universal Pictures, Fandango and NBCUniversal Brand Development.

DWA CEO and co-founder Jeffrey Katzenberg will become chairman of DreamWorks New Media, which will comprise the company’s ownership interests in AwesomenessTV and Nova. Katzenberg will also be a consultant to NBCUniversal.

“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; a home that will embrace the legacy of our storytelling and grow our businesses to their fullest potential,” said Katzenberg.

“This agreement not only delivers significant value for our shareholders but also supports NBCUniversal’s growing family entertainment business. As for my role, I am incredibly excited to continue exploring the potential of AwesomenessTV, Nova and other new media opportunities, and can’t wait to get started.”

His new role comes into effect when the transaction is completed by the end of this year.

DWA stockholders will receive US$41 in cash for each share of common stock. The agreement has been approved by the boards of directors at DWA and Comcast, and the controlling shareholder of DWA has approved the agreement by written consent.

NBCUniversal’s parent has long been keen to bring DWA into its stable as it looks to rival The Walt Disney Company in the family entertainment business.

Comcast’s Universal Pictures has made a play in the animated feature space during the last few years with movies including Despicable Me and Minions. DWA is behind movies such as Shrek, Kung Fu Panda and Madagascar.

In 2014, DWA held acquisition talks with Japanese company SoftBank as well as toy firm Hasbro. DWA currently has a multi-year deal to produce hundreds of hours of television for US SVoD service Netflix and has recently been rolling out its own TV channels across Asia.

Earlier this month, US telecoms giant Verizon took a 24.5% stake in DWA’s online youth network AwesomenessTV, valuing the latter at US$650m

At the end of 2015, Comcast rejected speculation that it is holding talks to take over UK commercial broadcaster ITV.