The Walt Disney Co. will acquire Capital Cities/ABC Inc. in
a "surprise merger of entertainment giants valued at about $19
billion," the companies announced this morning. Under the deal,
Capital Cities, which owns ABC as well as 80% of ESPN, eight TV
stations, and numerous other print and electronic media outlets,
will become a subsidiary of Disney, with Disney's Michael Eisner
continuing as Chairman & CEO. Cap Cities Chair & CEO Thomas
Murphy will relinquish his title, but will join Disney's board.
Robert Iger will remain as President of Cap Cities/ABC (AP,
7/31). Eisner and Murphy appeared on ABC's "Good Morning
America" to announce the deal. Eisner said discussions began to
"get intensive" during the past week: "It is like a natural fit
to go forth to be a great family entertainment company into the
next century." Murphy: "This is a great opportunity not only
for stockholders of both companies, but it is great for the
American people too, because you have all this wonderful family
programming." Eisner: "ESPN and ABC have been very aggressive
around the world as we have tried to be, and I would say if
anything benefits our companies commercially it is the way we can
come together with things like ESPN, the Disney Channel, in
China, India, Europe and the rest" ("GMA," ABC, 7/31).
