.....arrives for the european premiere of 'Kung Fu Panda 3' at Odeon Leicester Square on March 6, 2016 in London, England.
Former DreamWorks Animation CEO Jeffrey Katzenberg at the European premiere of "Kung Fu Panda 3" on March 6, 2016, in London. Photo by Luca Teuchmann—Getty Images

Comcast Confirms It’s Buying DreamWorks Animation

A day after declining to discuss deal "rumors or speculation," Comcast on Thursday confirmed reports that it is buying DreamWorks Animation in a deal that values the animation studio at $3.8 billion.

Under the agreement, Comcast (cmcsa) will pay $41 per share in cash for DreamWorks(dwa), representing a premium of more than 51% over the studio's closing price on Tuesday, the day before reports first surfaced that Comcast's NBCUniversal division was in deal talks with DreamWorks.

Hollywood executives Jeffrey Katzenberg and David Geffen, along with director Steven Spielberg, founded DreamWorks in 1994, and the animation studio was spun off in 2004. Katzenberg now serves as CEO of DreamWorks Animation, which is best known for massively successful animated franchises such as the Shrek, Madagascar, Kung Fu Panda, and How to Train Your Dragon. DreamWorks also has a large library of television content and recently expanded a deal to create content for Netflix (nflx).

In a statement, NBCUniversal chief Steve Burke called DreamWorks Animation "a great addition" to Comcast's studio division. "DreamWorks will help us grow our film, television, theme parks and consumer products businesses for years to come," he said.

Merging DreamWorks' animation properties with Universal's existing film and television operations is expected to help the combined company better compete with larger animation rivals— namely Walt Disney (dis). As Fortune reported yesterday, Comcast's NBCUniversal division reported a rough quarter for its film and broadcast units in terms of operating cash flow, with movies like Ride Along 2 and Hail, Caesar! disappointing at the box office.

The deal is expected to close by the end of the year, at which point Katzenberg will stay on as chairman of a new division focused on tech and digital video, DreamWorks New Media, and as a consultant to NBCUniversal. In a statement, Katzenberg called NBCUniveral "the perfect home" for DreamWorks. "This agreement not only delivers significant value for our shareholders, but also supports NBCUniversal’s growing family entertainment business," Katzenberg said.

Prior to the Comcast deal, DreamWorks had reportedly been in talks with potential buyers in China, where the animation studio has expanded its presence in recent years. DreamWorks also reportedly discussed deals with Japan's SoftBank and toy company Hasbro two years ago. During Comcast's quarterly earnings conference call on Wednesday, Burke called the Chinese entertainment market "a big, big opportunity."

Universal also recently signed a multiyear distribution deal with Amblin Partners, Spielberg's live-action film production company that houses the original DreamWorks brand, which is separate from DreamWorks Animation. DreamWorks SKG had a distribution deal with Disney that expires this year.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions