DreamWorks Animation Case Study Part 3: A Smart Acquirer

Mellody Hobson

Lesson time 11:07 min

Mellody shares what she and the DreamWorks board ultimately decided, and what happened as a result. She highlights the key takeaways and learnings from the case and inspires you to think big when it comes to acquisitions.

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Topics include: DreamWorks Case Takeaways • Takeaway #1: Think Long-Term • Takeaway #2: Confidentiality: Keep the Circle Tight • Takeaway #3: Be Clear About Your Intention • Takeaway #4: Be a Graceful Negotiator • Takeaway #5: Be Empathetic


[MUSIC PLAYING] - The company was being extraordinarily strategic. And the board was weighing in on what our options were. The Chinese private equity firm was going to leave DreamWorks as an independent with the current management and leadership team running the company and them being investors in that business by rolling over their equity. In the Comcast situation, we would be selling the business outright. So one of the things when you're board chair that you try to do is to hold out your opinion as long as possible so that you don't overly influence anything. And so while I had a point of view, I was very disciplined and deliberate about only giving hints of it so that we would be aligned, and the decision didn't feel bullied, or forced, or pushed. And mostly what I'm doing is asking questions, as opposed to making statements. And so I'm asking questions saying, if we do this, what is the downside? If we do that, we're doing lots of pros and cons and running all sorts of scenarios. But people have a strong point of view. And ultimately, we all were on the same side that we thought the Comcast deal made more sense because we can really see what the company would be, in terms of how it fit in with a big company like Comcast. And we were using the Pixar model to say that was a great outcome. It was a great outcome for shareholders, in terms of Disney buying Pixar. It was a great outcome for the people who worked in the business. And they continue to make really great movies. So when we thought about that and the fact that we could, potentially, maximize the price, the Comcast deal seemed like the better deal if we could get it done. So once Jeffrey was aligned with the board and we had all made the decision that it was a go with Comcast, it was a sprint. I really, after doing this transaction and being a part of it, I realized why I didn't become an investment banker. Once we knew that Jeffrey would vote with the board, we needed to fight for the best possible price from Comcast. Remember, at this point, the two companies were offering the same price, $35 a share. So ultimately, I threw out $42 a share, saying that's what it was going to take to get the deal done. And it wasn't made up. It was based on a real belief about what the business was worth and a whole host of other things. And so they came back with, I mean, it was a dance. But when it got to rubber meets the road, this is it, best and final, they were at $41. Went back to the full board before I went back to Jeffrey. And I said, we're at $41. I think this is the best price we're going to get. The board agreed, then went to Jeffrey and said, this is the number. And he said yes. We basically worked around the clock for several days, I mean, around the clock. It was this frenetic 15 days where I said, we have to move so fast because we were up against a decision that we had to make for the Chinese private equity company. We had to tell them yes o...

About the Instructor

Mellody Hobson knows how to make tough calls in trying times. As one of the most influential leaders in business today, she’s led companies through junctions of financial crisis, acquisitions, and restructuring. Become a more dynamic, confident business leader by diving into real-life case studies from Mellody’s career. Get an inside understanding of the pivotal decisions she’s made from the top, and build a strategic decision-making framework for your next step as a business leader.

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Mellody Hobson

Dive into the pivotal decisions that shaped Mellody’s career and learn how to apply strategic decision-making to your own future in leadership.

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