Chapter 619, 2007, Consortium Enterprises in Action 3
Starting in August 2006, three media industry giants: Disney, Comcast (the major cable TV operator in the United States) and Time Warner, filed a request to acquire Marvel Animation within a week, and they separated from Marvel Animation.
Individual negotiations began.
Soon afterwards, AT&T, the leading telecom operator in the U.S. market, joined in. AT&T's competitors, Verizon and Apple, the largest U.S. telecom companies, also showed strong interest, but did not make a formal offer.
Acquirers are unanimously optimistic about the golden-edged asset of Marvel Animation.
The company's operations are healthy and its asset status is astonishingly good. It has a net box office profit of more than 6 billion US dollars on its books. It also holds no less than ten popular IPs and more than 3,000 superhero character image rights, which it has almost acquired.
can actually generate profits.
(The cash profit on the books is generally not enjoyed by the acquirer. It is a bait that cannot be eaten. Even if it is an overall transfer, it is equivalent to adding more than 6 billion US dollars to the acquisition price, which is like selling a car.
For a second-hand car, if there is 50,000 yuan in the car, it must be the price of the second-hand car plus 50,000 yuan. The seller cannot give it away for free at a loss.)
During this period, Verizon and Apple's discussions about the acquisition were only in the preliminary stages and no formal negotiations were launched.
The fierce competition between several media industry giants became the focus of financial and entertainment news that attracted much attention from the end of 2006 to 2007. Who will win?
By the end of April 2007, after eight months of anxious negotiations, TV media giant Comcast took the lead in withdrawing from merger negotiations due to its weaker strength.
At the same time, Verizon Telecommunications Company officially joined in and proposed a formal acquisition plan with a premium of 33.7%. It plans to use cash and 50% stock, totaling 147 billion U.S. dollars, to acquire the entire equity of Marvel Animation.
At the last moment, Disney made a desperate move and proposed an acquisition plan with 72% of the stock, 28% of the cash, and a premium of 29.5%, totaling US$142.5 billion, to acquire the entire equity of Marvel Animation.
AT&T, the second-largest telecommunications company in the United States, once again made an effort and proposed an acquisition plan with 65% of the stock, 35% of the cash, and a 33% premium, totaling US$146.6 billion, to acquire the entire equity of Marvel Animation.
Each of these three options has its own advantages and disadvantages, making it really difficult for Wang Yaocheng to judge.
Judging from the equity plan, Disney is of course the most sincere and has proposed the stock exchange plan with the highest proportion, which seems to be full of sincerity.
Disney is a professional cultural media company. It is the best in everything from graphic animation to 3D animation, from theme parks to film and television companies, and from the film industry to the clothing and toy industry.
But precisely because of this, Wang Yaocheng is the least attractive, the least helpful to consortiums, and has the least say in public opinion circles in the United States and the world.
Since the Wang Consortium is not planning to focus on cultural media business, wouldn’t it be nice to independently control Marvel Animation?
On the other hand, although Time Warner has not revealed an attractive offer, as a giant in the media industry, it owns everything from content production (Warner Bros., HBO,) to product launch (Time Warner Limited Television), with three companies across the United States.
As one of the major news networks, and with hundreds of TV stations, newspapers, radio stations and record companies spread across the United States, Time Warner has already completed vertical integration in the media industry and is an ideal mouthpiece for the media industry.
Wang Yaocheng owns 7.8% of Time Warner's shares. If the two parties merge, he will have to sell part of his shares to maintain his status as the second largest shareholder and avoid violating specific regulations on the media industry in the United States.
Telecommunications giants Verizon Telecommunications Company and AT&T (American Telephone and Telegraph Company) got involved, simply to covet the high-quality content resources and gold-edge assets of Marvel Animation, with the intention of breaking through the cage of the telecommunications industry, achieving cross-border acquisitions, and competing for content control.
As the telecommunications market gradually becomes saturated and competition becomes fierce, telecommunications companies hope to gain more revenue from cultural content producers and the Internet, and Marvel Animation is naturally the best source of revenue.
Thomson, chairman of the American Telephone and Telegraph Company, said;
"AT&T is a mobile phone operator with national infrastructure and cellular networks. AT&T also hopes to make money from media content (the advertising revenue that content can bring). In the future, we can see more in media and mobile terminals
Different types of integration.”
Obviously, its biggest competitor Verizon Telecom also saw this and joined in without hesitation.
For Wang Yaocheng, the choice between the two is much easier. The one with the highest price will definitely get it.
Compared with Verizon Telecommunications Company, AT&T's offer is more sincere, with 65% stock, 35% cash, and a 33% premium acquisition plan, totaling US$146.6 billion, to acquire the entire equity of Marvel Animation.
To put it into detail, AT&T (American Telephone and Telegraph Company) has been ups and downs for a hundred years and is famous all over the world.
The predecessor of this company was the Bell Telephone Company. When it was founded in 1876, its founder was Alexander Bell, the famous father of the telephone, and owned the internationally famous Bell Laboratories.
In 1885, the Bell Telephone Company established a subsidiary company specializing in long-distance calling, called the American Telephone and Telegraph Company - AT&T, and more than ten years later, it reverse-acquired the Bell Telephone Company.
Remember, this is the first reverse merger in which a subsidiary acquires a parent company.
In its more than 100 years of development, AT&T has experienced three antitrust lawsuits by the U.S. government.
1981,
In the third antitrust lawsuit, AT&T was forced to agree to split with its subsidiaries. The old AT&T was split into a new AT&T (specialized in long-distance phone business) and seven local phone companies (respectively Western Bell, Southwestern Bell, Western Bell
Bell, Pacific Bell, BellSouth, Amidaco and New Zealand Corporation, commonly known as the "Seven Bell Brothers").
What I didn’t expect was;
After the split, AT&T became stronger because its business was more focused and its data business grew significantly.
In 1994, AT&T's revenue reached $70 billion.
However, everything goes as fast as it does, and AT&T's turning point inevitably came. At its peak, AT&T took action, split its network division into Lucent, and went public separately.
This was a fatal mistake, taking too big a step and breaking the egg. After the Internet bubble burst in 2000, the company's performance plummeted and it has never recovered since.
Not long after, a scene that had happened in history was shockingly repeated. Southwestern Bell, one of the seven spun-off sons, came to the door and requested a reverse takeover of its former parent company, AT&T.
Friends, this is the second reverse takeover of a subsidiary from a parent company.
Southwestern Bell is now the largest shareholder of Verizon. After acquiring parent company AT&T for US$16 billion, it gave up its own brand and switched to AT&T, a century-old famous brand.
Then, it spent US$34 billion to acquire its brother Pacific Bell, and in 2005 it spent US$86 billion to acquire BellSouth.
In 2007, it spent US$146.6 billion to acquire the entire equity of Marvel Animation, realizing a cross-border business strategy and demonstrating its grandeur.
After the merger is completed, Royal Fund will own 33.3% of AT&T's shares, only 0.2% behind Verizon, the largest shareholder.
Verizon promised not to reduce its shareholding, and Royal Fund promised not to increase its shareholding. The two have a tacit agreement to jointly control the operating power of AT&T.
In a private conversation with Wang Yaocheng, AT&T CEO Michael Armstrong revealed his strategic plans in full in order to gain Wang Yaocheng's full support;
He wants AT&T to transform from a long-distance phone company into an all-media and all-field information group, creating an industrial giant spanning the communications and media industries.
That is to say, AT&T will continue to seek mergers and acquisitions, and Michael Armstrong vaguely named the next merger target... It is Time Warner.
All of this is very consistent with Wang Yaocheng's strategic vision, and it's easy to see what will happen next.
Early June 2007
The Marvel Animation M&A negotiations that lasted for nearly ten months have finally come to an end. The Royal Family Fund has obtained 33.3% of AT&T's equity after the merger, ranking as the second largest shareholder. It also received an after-tax income of 41.6 billion U.S. dollars, replenishing the consortium's cash pool.
A sudden surge, from 339 billion U.S. dollars to 381.5 billion U.S. dollars. (It’s not that the numbers are wrong, the consortium still has other sporadic income)
Both parties in this transaction get what they need. Cooperating with AT&T will allow the mobile phone brand products of the consortium to fully enter the US market and squeeze out competitors such as Nokia, Samsung, HTC and other brands.
Wang Yaocheng has a stronger voice across the communications and entertainment industries, allowing him to remain invisible behind the scenes, taking an important step towards realizing the "Shadow Empire" strategy.
As a person registered in Hong Kong, he cannot acquire Time Warner. AT&T can help accomplish this goal.
Achieve the ultimate strategic goal through curves to save the country.
Coupled with the 7.8% stake in News World Corporation and Time Warner in his hands, Wang Yaocheng has achieved penetration and influence on the two major television news networks in the United States, and can influence the direction of public opinion, becoming a real boss behind the scenes.
Looking at it the other way around
AT&T can form closer cooperation with Global Communications to jointly deal with powerful competitors such as Verizon Telecom.
In fact, at the same time that the merger and acquisition was completed, AT&T has surpassed its competitors to become the world's largest telecommunications company and the largest broadband, wireless, local access and enterprise service provider in the United States.
Strong cooperation is more conducive to consolidating its market competitive position and providing users with better services.
AT&T was able to establish closer cooperation with Cisco and achieve a win-win strategy, which was successful from every perspective.
After the transaction is completed, Marvel Animation will have Crent Douglas as CEO and Chief Executive Officer. Pan Shiyi, the original President and CEO, will be appointed as Executive Director and Senior Vice President, responsible for the administrative affairs of Marvel Animation. Shea will be appointed as Marvel Animation
Senior Vice President, responsible for live-action film production and distribution.
Michael Armstrong spoke excitedly to the television media;
"This acquisition is a perfect marriage for the two companies and complements each other's strengths. We are both the final winners.
AT&T is committed to breaking down boundaries and integrating the best into one, which is a grand strategic plan.
For users, content producers, distributors and advertisers, this acquisition will bring about a new change in the media and communications industry in the United States, which is absolutely disruptive.
Having high-quality content has always been what AT&T is striving for. With the popularity of smartphones, the way users watch videos has evolved from TVs at home to mobile devices that can be seen everywhere. Users around the world are increasingly demanding high-quality videos.
This is a vertical acquisition within the TMT space, pure and simple.
Marvel Animation is a company that produces content, while AT&T is a company that distributes content. The reason why we want to merge is to bring better products and more choices to users.
With high-quality content, we can subvert the entire entertainment industry and break the boundaries of content distribution, thereby providing more value to users and providing them with the content they want;
No matter when, where, or how they want to get quality content, AT&T is their first choice."
Reading between the lines shows Michael Armstrong's ambitious ambition to break boundaries and achieve success. Wang Yaocheng admires people who have ambitions and have the courage to realize them.
Especially when people like this are working hard to make money for themselves, this feeling is even better.