Walt Disney on Wednesday said it would acquire Comcast’s 33% stake in Hulu, confirming that it would take full control of the streaming service.
The deal would move Hulu completely under Disney, allowing it to better integrate the service with Disney+ and ESPN+. Hulu is already part of various bundles with the services, but Disney is looking to potentially combine them into a single app. Comcast would walk away with billions of dollars and ammunition to bolster its own streaming service, Peacock.
The two companies had previously agreed to speed up the sale process, with November 1 being the deadline for both or either party to trigger a deal. Disney said that by December 1, it would pay Comcast’s NBC Universal $8.61 billion, which values the stake at $27.5 billion.
That, however, is unlikely to be the final price. Disney and Comcast have gone back and forth on the exact value of the deal. The $27.5 billion valuation was set five years ago, and Comcast CEO Brian Roberts has said the service is worth far more today.
In an Securities and Exchange Commission filing from September, Disney disclosed that the companies will both hire outside investment banking firms to come up with a sale price if the the two companies couldn’t agree on a price. Those two firms’ valuation will be used to set the final sale price for Disney to buy Comcast’s share of Hulu. Comcast hired Morgan Stanley and Disney hired JPMorgan Chase to help decide the value of Hulu.
If JPMorgan Chase and Morgan Stanley assessments are not within 10% of each other, the two firms will then select a third firm to come up its own figure. The ultimate sale price will come from the average of the two estimates that are closest in value to each other. The firms will base their assessment on the valuation of Hulu on September 30.
If the final price is higher than the $27.5 billion valuation, Disney will pay NBC Universal its percentage of the difference. The company expects the appraisal process to be completed in 2024.
