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NEW YORK — Fitch Ratings reiterated its ratings for The Walt Disney Co. Monday in the wake of the company's announcement that it will buy Marvel Entertainment Inc. for $4 billion in cash and stock.
Fitch maintains "A" issuer default and senior unsecured debt ratings for Disney and "F1" commercial paper and short-term issuer default ratings. Fitch said its ratings outlook for Disney is "Stable."
Through the deal, Disney will gain the rights to 5,000 Marvel characters, many of which were co-created by comic book legend Stan Lee.
The deal, announced Monday, is expected to close by the end of this year.
Fitch said that although some of Marvel's more popular characters have been licensed for movies already, it has a large catalog that could yield more popular characters for films. Fitch noted that films already being developed include characters such as Captain America, Thor and The Avengers.
The ratings company said Disney had $3.1 billion in cash at the end of June, but Fitch expects at least some of the cash part of the deal to be funded by debt.
Fitch predicted Disney will use free cash flow in the next year to buy back shares to offset the equity portion of the Marvel purchase price — something it did when buying Pixar Animation Studios Inc. for $7.4 billion in stock in 2006.
