Walt Disney (DIS) has grown into a household name in family entertainment and a leading international media conglomerate. Founded in 1923 as the Disney Brothers Cartoon Studio by brothers Walt and Roy Disney, the company now boasts a market capitalization of $174.9 billion and generated annual net income of $11.6 billion on annual revenue of $69.6 billion during its 2019 fiscal year (FY), which ended September 28, 2020. Under the leadership of Bob Chapek, who took over from Robert Iger as the company's CEO in February 2020, the company operates through the following business segments: Media Networks; Parks, Experiences and Products; Studio Entertainment; and Direct-to-Consumer and International.
Acquisitions are a major vehicle of growth for Disney—and have been over the past three decades. Studio Entertainment, the foundation upon which the company was built, is an example. While Disney produces high-quality video content under its own name, it has used acquisitions to become the owner of intellectual property rights to its blockbuster film and TV franchises. It bought Lucasfilm (owner of the "Star Wars" franchise), Marvel Entertainment (owner of a long list of Marvel heroes including Spider-Man and Iron Man), and Pixar (which created "Toy Story," "Cars" and other hits.) The company also distributes content through three major acquired brands—ABC, ESPN, and 21st Century Fox—as well as through its own Disney Channel. The purchase of 21st Century Fox in March 2019 has been the lynchpin in the company's launch of digital-content streaming service Disney+.
Below, we look in more detail at the company's five largest acquisitions.
- Acquisitions have helped Disney expand its reach in media and entertainment including 21st Century Fox, which it acquired in 2019 for $71 billion.
- Disney became the first media company to have a presence in filmed entertainment, cable television, broadcasting, and telephone wires after it bought Capital Cities/ABC.
- Disney acquired "Toy Story" creator Pixar in 2006 for $7.4 billion.
- The company became the owner of the "Star Wars" and "Indiana Jones" franchises following the purchase of Lucasfilm in 2012.
- In August 2009, Disney bought Marvel Entertainment for $4 billion.
21st Century Fox (TFCF Corp.)
- Type of Business: Global Media and Entertainment
- Acquisition Price: $71 billion
- Acquisition Date: Mar. 20, 2019
21st Century Fox emerged from the 2013 split of News Corp., the sprawling publishing and entertainment empire owned by media mogul Robert Murdoch. In the breakup, the publishing arm of the company retained the name News Corp. (NWS) while the entertainment division, including 20th Century Fox studio, was spun off into a separate company named 21st Century Fox.
When Disney acquired the company in 2019 for $71 billion, the entertainment business was renamed TFCF Corp., and many of the news assets were spun off into a new, separately owned public company called Fox Corp. (FOX). Through that series of deals, Disney became the owner of a basket of prized global franchises, including Twentieth Century Fox film and TV studios, cable networks FX and National Geographic, international TV business Star, and a 30% interest in Hulu LLC. Disney also retained perpetual rights to certain Fox brands, including Twentieth Century Fox and Fox Searchlight. The acquisition significantly augmented Disney's ability to provide more content and entertainment options to meet growing consumer demand.
- Type of Business: Media
- Acquisition Price: $19 billion
- Acquisition Date: July 31, 1995
Capital Cities/ABC was formed in 1985 when media firm Capital Cities Communications acquired American Broadcasting Companies for $3.5 billion. Disney's $19 billion purchase of the company in 1995 was considered the second-largest corporate takeover ever, bringing together two of the world's leading media and family entertainment companies.
Through the deal, Disney acquired TV stations, radio stations, a percentage of ESPN, The History Channel, A&E Network, Lifetime Television, and a publishing group. It transformed Disney into the first media company with a major presence in the four key distribution systems of filmed entertainment, cable television, broadcasting, and telephone wires (through a joint venture with three regional phone companies). The deal also expanded Disney's overseas presence as Capital Cities/ABC was already distributing ESPN abroad.
Disney launched its Disney+ streaming service in November 2012, a paid subscription service that competes with the likes of Netflix, Hulu, and Apple TV.
Pixar Animation Studios
- Type of Business: Computer Animation Studio
- Acquisition Price: $7.4 billion
- Acquisition Date: Jan. 24, 2006
Pixar was created in 1986 when Steve Jobs, the legendary co-founder of Apple, bought the computer animation division from Lucasfilms, which made major progress in perfecting animated film technology. Under Jobs, Pixar turned into the world's premier animated film producer. It created "Toy Story," the world's first computer-animated feature film, as well as movies such as "Finding Nemo." Disney's $7.4 billion purchase of Pixar in 2006 made it an instant leader in animated films. Under Disney, Pixar has produced films such as "Cars," "Ratatouille," "WALL•E," and several sequels to "Toy Story."
- Type of Business: Film and TV Production Company
- Acquisition Price: $4.1 billion
- Acquisition Date: Oct. 30, 2012
Lucasfilm was founded in the San Francisco Bay Area in 1971 by filmmaker George Lucas. The studio is best known for creating and producing the blockbuster "Star Wars" and "Indiana Jones" franchises and has been a leader in developing special effects, sound, and computer animation.
Disney's acquisition of the company in 2012 gave it access to the distribution rights of those high-grossing franchises. Disney also has leveraged those franchises through its theme parks and resorts, such as the "Star Wars: Galaxy's Edge"-themed entertainment area at several Disneyland World locations.
- Type of Business: Entertainment
- Acquisition Price: $4 billion
- Acquisition Date: Aug. 31, 2009
The precursor to what would become Marvel Entertainment was founded in the 1930s under the name Timely Comics. The comic-book publisher went through various name changes, different ownerships, filed for bankruptcy, and developed into a premier creator and publisher of entertainment media with a library of 5,000 characters, including Spider-Man, Iron Man, X-Men, Captain America, and the Fantastic Four.
Disney leveraged its $4 billion purchase of the company to accelerate the number of movie releases starring Marvel characters, including box-office hits such as "The Avengers" (2012), "Iron Man 3" (2013), "Black Panther" (2018), and many more.