Comcast To Buy DreamWorks Animation For $3.8bn

US entertainment and cable giant Comcast has announced a $3.8bn (£2.6bn) deal to buy DreamWorks Animation, the studio known for its Shrek and Kung Fu Panda films.

Under the acquisition, DreamWorks will become part of the Universal Filmed Entertainment Group, which includes Universal Pictures.

DreamWorks co-founder and chief executive Jeffrey Katzenberg will become chairman of DreamWorks New Media.

The former Walt Disney executive will also serve as consultant to NBCUniversal, a unit of Comcast Corp.

Mr Katzenberg owned nearly 10m shares, meaning he will receive over $400m out of the deal.

Both Comcast and DreamWorks' boards have approved the transaction, which is set to close by year's end.

DreamWorks stockholders will receive $41 cash for each share, a 24% premium over its closing price on Wednesday.

Steve Burke, chief executive of Comcast unit NBCUniversal, said: "DreamWorks will help us grow our film, television, theme parks and consumer products businesses for years to come."

The merger will enable Comcast to take on Walt Disney in the family entertainment business.

Analysts noted that despite churning out popular franchises such as Madagascar, DreamWorks has not generated significant earnings since 2010.

They said the company is worth far less than either Marvel or Lucasfilm, which Disney acquired.