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Media Moguls on the March Around the Globe

Disney bids to purchase ABC parent in latest spate of big media mergers

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WALT Disney Company's surprising bid to buy Capitol Cities/ABC represents one of the largest takeover attempts in the history of American business.

If the merger goes through, the new and expanded Disney would be an enormous force in worldwide entertainment. Its holdings would include everything from Disneyland and the classic Disney animation studio, to ABC network TV, the ESPN sports channel, and big stakes in such foreign ventures as Scandinavian Broadcasting Systems.

The proposed merger is also a symbol of a consolidation trend that has been sweeping through the media environment in recent weeks.

''This transaction is a once-in-a-lifetime opportunity to create an outstanding entertainment and media company,'' Walt Disney's chief executive officer Michael Eisner said in a statement.

As a result of the purchase, which has already been approved by both company's boards, Capital Cities/ABC will become a wholly owned subsidiary of The Walt Disney Company.

Mr. Eisner, who worked for ABC for many years as head of children's programming under Barry Diller, said the merger would put Disney in a strong position to compete internationally.

''The Walt Disney Company will now have more global outlets to provide the highest quality entertainment, news and sports programming,'' said Eisner.

Analysts and executives on both coasts were shocked when just after 8 a.m. Eastern time yesterday, news alerts flashed across the Associated Press wire: Walt Disney Company to buy Capital Cities/ABC.

''We were sitting here stunned in disbelief,'' says a senior CBS executive. ''We're clearly dismayed that they're not going to buy CBS, which was also rumored.''

Although most industry analysts' initial assessments were very positive, the implications of the sale are far from clear.

''The deal gives Disney an amazing capability,'' says Joseph Turow, professor of communications at the University of Pennsylvania's Annenberg School of Communication.

''It is a really nice match that is better for Disney than CBS would have been.''

''Strategically, it makes a lot of sense,'' says Tim Wallace, vice present and entertainment/media analyst for S.G. Warburg & Co. ''The financial interests and syndication rules keep the networks from producing and distributing their own shows and Disney specializes in producing their own programming.''

But industry analysts note that Disney is notoriously tight-fisted, which could impact, among other things, ABC's top-rated news programs.

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