By Liam Reilly and Oliver Darcy, CNN
(CNN) — Disney will acquire Comcast’s one-third stake in Hulu for an expected $8.61 billion, the company said Wednesday, in a deal that will put the streaming service entirely inside the Magic Kingdom when the transaction closes later this year.
“The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives,” the company said in a short statement.
Wednesday’s deal brings to an end long-running speculation about the fate of Hulu, but still requires an appraisal process that is expected to be completed in 2024 to further assess the streaming service’s fair value before a final sale price tag is agreed upon.
“We look forward to the appraisal process and the determination of Hulu’s fair market value which we expect will reflect the extraordinary value of the business,” Comcast said in a statement.
Disney’s bid to acquire the remaining shares in the platform began in 2019 under an agreement between the two companies that gave Hulu a value of at least $27.5 billion.
Disney chief executive Bob Iger publicly signaled in recent months his intention to acquire the remaining shares of the streaming service, saying in March that Disney “was studying the business very, very carefully.”
The decision comes as the entertainment giant makes dramatic shifts in its media business, with Iger openly floating the possibility it could sell off its ABC division and is on the hunt for a “strategic partner” for ESPN as it aims to quickly transition from the linear television business to streaming.
Hulu, the subscription-based streaming platform, was founded in 2007 with joint ownership by a group of media companies — including 21st Century Fox, Comcast, and CNN’s former parent company Time Warner. In recent years, those companies have begun to focus on their respective streaming platforms.
In 2020, NBCU launched its own subscription-based streaming platform, Peacock, and Comcast began shifting programming from Hulu onto the new platform, including Bravo and NBC shows.
But Hulu has continued to show growth with hit original movies and shows including “The Handmaid’s Tale,” “The Bear,” and “Reservation Dogs,” amassing more than 48 million subscribers even as the price of the service has continued to rise.
Disney has also bundled the Hulu service as part of its larger portfolio of streaming services, including Disney+ and ESPN+, offering it at a discounted rate as part of the larger package. But Hulu has been a bright spot in Disney’s media empire as it works to quickly make streaming profitable and capture a large subscriber base lured by its vast entertainment library.
“I’ve now had another three months to really study this carefully and figure out what is the best path for us to grow this business,” Iger said on a May earnings call. “It’s clear that a combination of the content that is on Disney+ with general entertainment is a very positive, is a very strong combination from a subscriber perspective.”
Disney is set to report its quarterly earnings results on Nov. 8.
The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
