By Abdul Siddiqui

When Disney struck a deal to acquire comic book giant Marvel in August, many Marvel fans were distressed, suspecting Wolverine would be turned into Bambi and the Hulk into the eighth dwarf. Those fears are unfounded.

The acquisition, approved by Marvel on Dec. 31, makes perfect sense.

Yes, Disney paid a premium for Marvel, offering TK a share, 29 percent above the market value. And, yes, as soon as the agreement was announced, various other companies that own rights to many Marvel properties were quick to assert those rights. Many of Marvel’s biggest names are signed away to other companies indefinitely, including film and TV rights to Spider-Man, Ghost Rider, X-Men and Fantastic Four, Michael Nathanson of Bernstein Research has pointed out. Other rights, such as distribution of films, integration into theme parks, merchandising of various characters and video game development of certain characters are locked up for at least few years in most cases.

Yet the deal still makes sense because it will allow both companies to grow significantly. In 2008, 62 percent of Marvel’s revenue came from licensing, and more than a third of that was generated internationally. Given Disney’s strength in the international consumer product market, Nathanson predicts that Disney will be able to boost Marvel’s international revenue by at least $40 million annually.

Disney can also cut some Marvel costs, using its own international operations to oversee Marvel’s, which is expected to generate an additional $21 million a year.

Disney also has many more “consumer touch points,” Nathanson says, so it is likely to be able to strike better licensing deals in the future than Marvel itself could. In addition, Disney’s Disney XD channel already carries more than 20 hours of Marvel programming each week, so Disney will now save those licensing costs.

Overall, this will enable Disney to claim advertising revenue from these shows and have a competitive edge against other “boy-centric” networks, such as VIA’s NICK and TWX’s Cartoon Network, says George L. Hawkey of Barclays Capital.

The greatest risk in the acquisition is whether Disney will be able to turn Marvel’s lesser-known characters – such as Thor and Luke Cage – into cash cows, says Hamilton Faber of Atlantic Equities. Nathanson is more optimistic, noting that films featuring less well-known characters, like Daredevil and Ghost Rider, “managed to gross over $200m globally.”

The family genre is “a Disney core competency,” he adds, but Marvel will “undoubtedly improve Disney’s competitive standing” in the adult action market segment.

When Disney paid $7.4 billion for Pixar in 2006, Pixar “did not have the licensing and/or publishing businesses that are part of the Marvel franchise,” Drew Crum and David Pang of Stifel Nicolaus said in a report.

So when all is said and done, Donald Duck and Wolverine and all their friends should make a good team.