Disney's announcement of its acquisition of Capital Cities/ABC in August 1995 for a consideration of $19.6 billion; was then the 2nd largest acquisition in history and created the world's largest media conglomerate with assets of $30 billion and market capitalisation of $50 billion.
The Walt Disney Company, the creator of Mickey Mouse and other related characters was started in 1923 by Walter Elias Disney and his brother Roy. The company released the first ever full length animated feature film Snow White and the Seven Dwarfs in 1937 and is now the world wide leader in feature animations. Today the company has investments in cartoons, animated films, theme parks, television stations, movie studios, record labels, and sports clubs.
At the time of the merger, Disney a publicly traded company had total revenues of $12.1 billion resulting in net profits of $1.3 billion. At that time, the company was very cash rich and needed to find new avenues for investment to prevent being taken over. Disney found a perfect match in Capital Cities the owners of ABC; which was also a publicly traded company.
ABC (The American Broadcasting Corporation) was formed in 1943 when NBC was forced to sell one of its radio networks (the blue network) by the Federal Commission for Communication (FCC). The network diversified into television in 1948. Capital Cities bought the network in 1985 for $3.5 billion and positioned ABC as a leader in financial news reporting. At the time of ABCs acquisition by Disney; Capital Cities/ABC owned 224 affiliated stations, 10 TV stations, the ABC Radio Networks providing content to 3,400 radio stations and ESPN (the market leader in cable sports channels). The company also had minority interests in 6 European TV, 7 daily papers and over 100 periodicals.
In a joint statement, the companies stated that "the merged company will create tremendous value for shareholders by taking full advantage of the complementary strengths of each organisation"....
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