Softbank in talks to buy Dreamworks studios in bid for Asian expansion

DreamWorks shareholders may welcome a takeover, having seen poor performances from recent films

Animated movie maker DreamWorks would see its movies like How to Train Your Dragon pushed aggressively into the cartoon-loving Chinese market under SoftBank’s plans for Asian domination if the Japanese conglomerate succeeds in buying the famous studio.

SoftBank, a conglomerate founded and run by Japan’s richest man, Masayoshi Son, is in talks to add the maker of Shrek and Madagascar to its diverse range of businesses. It is offering $3.4bn for the company, according to reports.

Perhaps most important for the deal is the way SoftBank could sell DreamWorks’ video content to customers of its Yahoo Japan operations and possibly Alibaba, the vast Chinese online marketplace of which Softbank holds more than 30 percent.

As well as offering DreamWorks’ movies online and to customers’ mobile devices, SoftBank could also use the studio’s characters to go into the video games made by another business where it owns a big stake, GungHo Online Entertainment.

The Hollywood Reporter, which first broke the story of the potential deal, pointed out that Chinese viewers are among the world’s biggest fans of animated movies, with the genre making up some 10 percent of box office revenues in the country.

Mr Son, who is famed for taking huge, and risky bets, hired Google’s Nikesh Arora to run a dedicated Internet and Media business, prompting speculation of big deals to follow.

The 57-year-old is a rare maverick on the Japanese business landscape and has declared SoftBank would have invested in 5000 companies by 2040.

DreamWorks shareholders may welcome a takeover, having seen poor performances from recent films.

Softbank is an aggressive investor in a diverse range of telecoms and Internet businesses. Its most successful punt was to put $20m into Alibaba in 2000. In last week’s record flotation, that stake is now worth $50bn. Other cunning plays include Mr Son’s foresight in persuading Steve Jobs to give him the exclusive Japanese distribution rights to the iPhone – two years before the device had been announced.

He charmed Jobs with a hand-drawn sketch of how he thought the iPhone should look, and left the meeting with a deal that was, when the phone finally launched, to make SoftBank hundreds of millions of dollars.

Dreamworks Animation has its roots in the studio set up by Steven Spielberg, music executive David Geffen, and former Disney executive Jeffrey Katzenberg.

It was the animation division of the mini-empire which was split off and floated as a separate company in 2004, led by Mr Katzenberg, who is still chief executive.