What does Disney's purchase of Marvel mean for the wider M&A market?

With a $4 billion purchase of Marvel Entertainment, Walt Disney Co. has today added over 5000 characters to its already abundant plethora of familiar faces. While for Marvel fans the acquisition has already raised questions as to what that means for the future of their favorite characters (Captain America teaming up with Captain Jack Sparrow, perhaps?), from a business perspective the merger raises totally different, yet equally compelling issues.

First up are the issues surrounding anti-trust laws that are beginning to circulate around Disney right now. The fact is, with the Marvel purchase now under Disney's belt, much of America's entire animated universe is now in the hands of one massive media conglomerate and that raises the question of just how many cartoons a company has to own before the Federal Trade Commission (FTC) goes all Spider-Man and web-slings into action to call the shots?

A look at Disney's payroll really puts the near-monopoly into perspective. Alongside Warner Bros., Disney pretty much has ownership of all of the US's beloved cartoon characters - but even in this widely-acknowledged duopoly, Disney's market presence is heads and shoulders above Warner Bros's.

While Warners can lay an impressive claim to the likes of the Hanna-Barbera world, their own Warner Bros. cartoon empire and the massive (and key Marvel-rival) DC Universe, Disney not only has its own classic dynasty (Micky, Minnie, Donald and co.), but the much-loved Pixar cartoons, Jim Henson's The Muppets and, now, the mighty world of Marvel.

Its an interesting situation, with only one lone entry on movie monthly Empire Magazine's 20 Greatest Comic Characters of All Time falling outside of either the Disney or Warners camps. But when, or will, Obama take on the superheroes? After all, while the issue of superhero rights undeniably falls relatively low on Washington's priorities right now (recession, anyone?), many analysts are beginning to question just what it will take for the government to step in with anti-trust legislation.

But the issues surrounding the acquisition don't end there. Aside from the obvious benefits for Disney now being able to create a non-stop string of blockbusters (both animated and live-action) from now until, well, eternity, the merger also offers further benefits for the wider economy.

While earlier in this decade there was something of a craze for M&A, there has more recently been a drought in the number of acquisitions we are seeing. What's more, the deal between Disney and Marvel is a cash-and-stock deal, not a leveraged deal like those we have become accustomed to over the last few years and this breaking of the flood gates, it is speculated, could signify a change in the current opinion of M&A.

In other words, while the current train of thought surrounding M&A is that survival in the economic crisis will be more likely if SMEs pull their resources, cut costs and consolidate their sales forces, Disney's buyout of Marvel has essentially happened simply because Disney admire Marvel and want to be a part of that success.

So does that mean the drought is over? Well, not necessarily, but it is likely that if smaller firms see someone like Disney doing M&A not because they need, but because they want to, they'll follow suit. While its equally as likely that Disney and Marvel are going to clash over issues such as animation style, distribution and marketing, from a deal standpoint it is much more solid tie-up to those highly leveraged mergers we have become accustomed to since the recession hit. And that can only suggest good things for the future of M&A.

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