Categories Analysis, Leisure & Entertainment

Acquisitions: A look at Disney’s golden assets

AT&T Inc. (NYSE: T) was recently criticized by an activist investor for the acquisitions it made and their impact on the stock performance. However, The Walt Disney Co. (NYSE: DIS) has struck gold with many of the companies it acquired. Here are some of the best deals done by the Mouse House:

Pixar

In 2006, Disney acquired Pixar Animation Studios in an all-stock transaction valued at $7.4 billion. Pixar gave us popular movies such as Toy Story, Ratatouille and Frozen, among others.  

Marvel

In 2009, Disney picked up Marvel for $4.2 billion. Marvel, which owns The Avengers and the X-men, has generated several blockbusters for Disney.

Lucasfilm

The next key asset purchased by Disney was Lucasfilm, the producer of the massively popular Star Wars and Indiana Jones movie franchises. Disney bought Lucasfilm for just over $4 billion in 2012.

21st Century Fox

The most lucrative transaction done by Disney was the purchase of entertainment assets from 21st Century Fox (NASDAQ: FOXA) for $71.3 billion. This deal has provided Disney with a vast trove of content that will give it a huge advantage in the streaming space when it launches its streaming service Disney+.

Hulu

The acquisition of 21st Century Fox gave Disney a majority stake in Hulu. After AT&T sold its 10% stake to Disney, Comcast (NYSE: CMCSA) agreed to sell its 30% stake and give the Mouse House full control of the streaming service. Hulu is the producer of the popular series The Handmaid’s Tale.

Disney yearly profit growth trend

Profits

Looking at the company’s performance from 2013, after the first three major assets had joined the Disney family, profits have increased in the double-digits consistently, except for 2017, which saw a 4% decline. The decline was caused by lower segment operating income at Media Networks, Studio Entertainment and Consumer Products & Interactive Media as well as higher net interest expense and negative foreign currency impacts.

Disney’s shares have gained 23% in the past 12 months and 26% year-to-date.

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