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The Walt Disney Company revealed it purchased the rest of the stake in Hulu from Comcast. The deal involves a one-third stake, which is equivalent to 33%.
The acquisition is an expected move from Walt Disney since it is already offering Hulu on its own streaming platform, Disney Plus. Once the transaction closes this year, Hulu will be completely integrated into the Magic Kingdom.
A Boost to Achieve Disney’s Goal for Its Streaming Unit
CNN Business reported that the deal officially ended the long-running speculation about Hulu’s fate in the industry. On the other hand, with the streaming platform on its portfolio, Disney expects a big boost to achieve its streaming plans.
“The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives,” Walt Disney said in a statement.
Then again, it should be noted the transaction still needs to go through an appraisal process that is expected to be completed next year. This must be carried out to review the streaming service’s fair value further before a final sale price tag is set and agreed upon by the companies.
The Financial Terms of the Deal
Initially, Walt Disney and Comcast scheduled the deadline to resolve the ownership of Hulu by January. However, in September, the companies decided to move the date to an earlier time, and this led to the announcement of the acquisition on Wednesday, Nov. 1. Disney also posted details of payments for the deal and confirmed its $8.6 billion investment.
“The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives,” The Walt Disney Company said in a statement. “Under the terms of the put/call arrangement, by Dec. 1, Disney expects it will pay NBCU approximately $8.61 billion, representing NBCU’s percentage of the $27.5 billion guaranteed floor value for Hulu that was set when the companies entered into their agreement in 2019 minus the anticipated outstanding capital call contributions payable by NBCU to Disney.”
Photo by: BoliviaInteligente/Unsplash
