Disney buying Marvel for $4 billion

Updated: 7:30 p.m. ET

Mickey Mouse, Donald Duck, Spider-Man, Iron Man and Wolverine. 

The possibilities boggle after Walt Disney (DIS) announced today that it will buy Marvel Entertainment (MVL) for $4 billion in cash and stock.

The purchase gives Disney, the operator of theme parks and the ABC broadcast network, ownership of more than 5,000 Marvel characters.

• Bing: More on the history of Marvel Entertainment

As important, the deal will give Disney something it really doesn't have: entertainment that appeals to boys. 

With the "Hannah Montana" franchise and the blockbuster Princesses merchandising line, Disney already has a strong position in entertainment that appeals to girls, especially little girls.

Films based on Iron Man, Spider-Man and Wolverine have pulled in hundreds of millions at the box office.

Disney CEO Bob Iger said buying Marvel will allow Disney to extend the characters in its parks and stores (watch the video at the bottom of this article).

"We have a great opportunity to grow the Marvel brand," Iger told Bloomberg TV. 

Under the deal, Marvel shareholders will receive $30 a share in cash plus about 0.745 Disney shares for each Marvel share.

Based on the Aug. 28 closing price of Disney’s stock, the transaction values Marvel at $50 a share. That’s a 29% premium to Marvel’s closing price that day.

Marvel jumped $9.72, or 25.2% , to $48.37 today.

"They have a reliable franchise of characters which should do well in the parks, bolster their live-action film pipeline and improve their standing with boys," analyst Chris Marangi of Gabelli & Co. told Bloomberg News. 

"You can’t look at the price based on trailing earnings. There’s a pipeline of films and very profitable licensing revenue here."

Disney, the world’s biggest media company, fell 3% to $26.04 today. Shares had risen 18% this year before today.

Marvel said earlier this month that second-quarter profit fell 38% after a drop in licensing sales related to the "Iron Man" and “Incredible Hulk” movies.

"Iron Man," released by Viacom's (VIA) Paramount Pictures in May 2008, generated $585.1 million worldwide, making it the second-biggest release of 2008, according to researcher Box Office Mojo. The sequel is scheduled for May 2010.

Marvel has aggressively exploited its most popular characters through motion pictures and consumer products, and it has a thicket of deals with various studios that will stay in place.

Twentieth Century Fox will continue with the "X-Men" franchise while Sony Pictures Entertainment will keep "Spider-Man."

And Paramount Pictures will continue to release Marvel’s "Iron Man” films -- at least until that deal expires. So essentially Disney is in business with a trio of rival studios.

The acquisition comes as Disney, with its vast theme-park operations and television advertising business, has been struggling because of a lack of hit DVDs, soft advertising sales at ABC and drooping consumer spending at theme parks, The New York Times noted.

Disney’s profit in its fiscal third quarter, which ended June 27, dropped 26%.

Net income fell to $954 million, or 51 cents a share, from $1.28 billion, or 66 cents a share, in the year-ago period. Revenue fell 7%, to $8.6 billion.