Disney, Capital Cities-ABC Shareholders Meet for Vote on Merger
Jan. 04, 1996
NEW YORK (AP) _ The Walt Disney Co. hopes to take another step toward expanding its Magic Kingdom today by getting shareholder backing for its $19 billion purchase of the owner of the ABC TV network.
But the biggest buyout deal ever in the media and entertainment business must also get approval from federal regulators. The partial government shutdown has slowed that process.
Shareholders of Burbank, Calif.-based Disney and New York-based Capital Cities-ABC Inc. were expected to approve the cash and stock buyout at separate meetings today.
The Disney-Capital Cities deal was announced in July, the first in a summer full of stunning media and entertainment mergers. The deal would unite the two media powerhouses.
Disney boasts a rich array of animated characters led by Mickey Mouse, and production experience that has given viewers hit movies like ``The Lion King,'' TV shows like ``Home Improvement'' and popular theme parks.
Capital Cities-ABC has a potent and multidimensional program distribution system and news stars like Peter Jennings, Ted Koppel and Barbara Walters. It owns the ABC-TV network, which trails NBC by a slim margin so far in this season's prime-time ratings; TV and TV and radio stations; and stakes in cable networks like ESPN, Lifetime Television and A&E. It also owns newspapers, shopping guides and book publishing operations.
Together, the companies had revenue of $16.5 billion in 1994 and will at least temporarily outrank Time Warner Inc., which had been the industry leader in 1994 with $15.9 billion in revenue.
Time Warner is expected to surpass the combined Disney-Capital Cities revenue totals, however, once it completes its $7.5 billion purchase of Turner Broadcasting System Inc. That deal was announced in September and also faces regulatory scrutiny.
In between those two megadeals, Westinghouse Electric Corp. agreed to buy CBS Inc. for $5.4 billion and has already completed that purchase.
The Disney-Capital Cities deal is being reviewed by the Justice Department and the Federal Communications Commission.
Company officials say they expect to get approval from both agencies a few weeks after the government shutdown ends and hope to complete the deal later this month or in February.