Disney Acquires NBCUniversal’s Stake in Hulu
Disney will pay Comcast’s NBCUniversal nearly $439 million for its stake in Hulu, taking full control of the streaming service. This acquisition marks the end of a prolonged appraisal process that began a few years ago.
Details of the Deal and Appraisal Process
In November 2023, Disney confirmed its acquisition of a 33% stake in Hulu from Comcast for a minimum of $8.6 billion. This amount reflected Hulu’s guaranteed floor value of $27.5 billion, as outlined in a regulatory filing. The deal closes the chapter on a process that has been underway for quite some time.
Disney’s Ownership of Hulu: A Timeline
Disney has managed Hulu since 2019 when Comcast ceded its authority, effectively becoming a silent partner. Hulu, which began in 2007, evolved quickly into a platform supported by entertainment giants. Disney became involved in 2009, planning to offer shows from ABC, ESPN, and the Disney Channel. A decade later, Disney gained majority control when it acquired 21st Century Fox.
Valuation and the Appraisal Dispute
According to a regulatory filing, Disney’s appraiser valued Hulu below the guaranteed floor value during the initial phase of the appraisal. NBCUniversal’s appraiser, on the other hand, valued the stake considerably higher. As a result, a third appraiser was brought in, and the final valuation concluded that Disney would pay $438.7 million for NBCUniversal’s stake in Hulu.
Strategic Impact on Disney’s Future Plans
Disney CEO Bob Iger expressed satisfaction with the resolution, stating that the acquisition would allow for deeper integration of Hulu’s general entertainment content with Disney+ and ESPN’s direct-to-consumer product. This integration is expected to offer consumers an unrivaled value proposition. The acquisition is set to close by July 24 and will not affect Disney’s fiscal 2025 adjusted earnings forecast.
Market Reaction
Following the announcement, Disney’s shares saw a slight increase in morning trading on Tuesday, reflecting a positive response from investors.