Summary
This 8-K filing from The Walt Disney Company (DIS) announces that NBC Universal (NBCU) has exercised its right to require Disney to purchase NBCU's 33% stake in Hulu. This exercise is based on a put/call arrangement outlined in the Hulu Agreement. The purchase price will be determined by the greater of Hulu's equity fair value as of September 30, 2023, or a guaranteed floor value of $27.5 billion. Disney expects to pay NBCU approximately $8.61 billion by December 1, 2023. This amount represents NBCU's 33% share of the $27.5 billion floor value, less approximately $567 million in outstanding NBCU capital call contributions. If Hulu's equity fair value is ultimately determined to be higher than the floor value, Disney will pay NBCU the difference. The transaction is a significant event for Disney, as it moves towards full ownership of Hulu and will impact its financial reporting and strategic direction for its streaming assets.
Key Highlights
- 1NBC Universal (NBCU) has exercised its put option to sell its 33% stake in Hulu to Disney.
- 2Disney is obligated to purchase NBCU's stake in Hulu.
- 3The purchase price is based on the greater of Hulu's equity fair value or a floor value of $27.5 billion.
- 4Disney anticipates paying NBCU approximately $8.61 billion by December 1, 2023.
- 5This payment accounts for NBCU's 33% ownership percentage of the $27.5 billion floor value, reduced by outstanding capital call contributions.
- 6Disney will also share an estimated 50% of its U.S. tax savings related to the acquisition with NBCU over approximately 15 years.
- 7Hulu's equity fair value will be determined as of September 30, 2023, via an agreed appraisal process.