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Setting entertainment and tech outlets agog, Japanese conglomerate SoftBank Corp. is reportedly in talks to acquire DreamWorks Animation for $3.4 billion. However, chances of finalizing the deal may be slim, according to a SoftBank-associated source.
The two companies held an emergency meeting last Thursday to deliberate the agreement. DreamWorks Animation founder and CEO Jeffrey Katzenberg, who called the meeting, has spent years seeking a buyer for the company.
Over the last couple of years, the Glendale-based animation studio has grappled with fluctuating stock (shares have declined 37 percent this year) and a paucity of theatrical releases--many of which have underperformed. To bolster the company’s financial success, Katzenberg is looking to venture into television, online video, and consumer products. An acquisition, outlets report, could also buoy the company’s efforts to expand and open it to the lucrative Asian market.
SoftBank may benefit from the deal as well. The telecom giant, which acquired Sprint for $20 billion in 2012, may be interested in incorporating content from the animation studio into its mobile platforms. According to The Wall Street Journal, SoftBank CEO Masayoshi Son is considering using the content-based strategy to distinguish Sprint from AT&T and Verizon Wireless, theoretically rendering it more competitive in the U.S. market.
SoftBank has peppered headlines over the last couple of months. In August, the Tokyo-based company abandoned plans to acquire T-Mobile. Weeks later, SoftBank’s 32 percent stake in the Chinese online e-commerce phenomenon Alibaba established it as a corporate force to be reckoned with after the company’s historic IPO.
SoftBank CEO of Internet and Media Nikesh Arora is thought to have been a major driving force behind the deal. Arora, a former chief business officer at Google, allegedly serves as a liaison between SoftBank and DreamWorks Animation.
Update: The Wall Street Journal reports that prospects of a deal may be waning.
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