Comcast's NBCUniversal buys DreamWorks Animation in $3.8-billion deal

LOS ANGELES -- NBCUniversal said Thursday it has reached an agreement to acquire DreamWorks Animation in a deal valued at $3.8 billion.

Under terms of the agreement, NBCUniversal's parent company, Comcast Corp., pledged to pay DreamWorks Animation shareholders $41 in cash for each share of their DreamWorks stock. The transaction is expected to close later this year, subject to an antitrust review by government regulators.

The DreamWorks deal came together with breathtaking speed in the last few weeks, becoming something of a match made in Hollywood heaven.

"DreamWorks Animation is a great addition to NBCUniversal," said Steve Burke, chief executive of NBCUniversal, in a statement announcing the agreement.

"(DreamWorks Chief Executive) Jeffrey Katzenberg and the DreamWorks organization have created a dynamic film brand and a deep library of intellectual property," Burke said.

As part of the deal, Katzenberg will become head of a newly created division called DreamWorks New Media, which will be made up of the company's interests in Awesomeness TV, an Internet TV venture, and another brand, Nova.

Katzenberg also will serve as a consultant to NBCUniversal but he will give up day-to-day control of the animation unit that he built from scratch. The animation studio will be folded into the much larger Universal Filmed Entertainment group, based in Los Angeles.

NBCUniversal plans to operate two animation film labels: DreamWorks Animation and Illumination Entertainment, which is run by Chris Meledandri, the creative force behind the juggernaut "Despicable Me" and "Minions" films.

Meledrandi will have wide latitude in how both units will be run, and he will have creative oversight in the slate of film projects coming from both film labels.

"We are fortunate to have Illumination founder Chris Meledrandri to help guide the growth of the DreamWorks Animation business in the future," Burke said.

NBCUniversal had long had its eye on DreamWorks Animation, intrigued by the popularity of its creations, including "Shrek," "Kung Fu Panda," "Madagascar" and "How to Train Your Dragon." The properties have enormous value, including for NBCUniversal's growing Universal Studios theme park unit.

NBCUniversal also was drawn by DreamWorks' vibrant TV operation, which churns out hundreds of hours of animated family entertainment. Universal Pictures does not have its own TV operation.

Over the last two years, Universal Pictures' top executives, including Jeff Shell, chairman of Universal Filmed Entertainment, and Ron Meyer, vice chairman of NBCUniversal, had occasional conversations with DreamWorks founder Katzenberg about a possible acquisition.

But the two sides never could figure out how to structure the deal, according to knowledgeable people. NBCUniversal had plenty of cash to make a deal happen -- but the sticking point had long been that Katzenberg did not want to relinquish control of the company that he built into a powerhouse.

In the last few weeks, conversations heated up after NBCUniversal learned that Katzenberg had quietly begun shopping for a deep-pocketed investor to inject some cash into his operation.

That came about shortly after Katzenberg made what seemed like an audacious suggestion at an investor conference, announcing that he wanted to unite DreamWorks Animation and Paramount Pictures into one company -- if he could attract an investor to pull it off.

Paramount's owner, Viacom Inc., is separately looking for an investor for its beleaguered film unit.

NBCUniversal stepped in, and talks with Katzenberg began in earnest. The NBCUniversal team, led by Burke, persuaded the DreamWorks Animation chief that Universal Pictures would be the best home for his beloved company.

This story was originally published April 28, 2016 at 11:43 PM with the headline "Comcast's NBCUniversal buys DreamWorks Animation in $3.8-billion deal ."