Suddenly, TV personalities such as Roseanne and Barbara Walters were members of the same family as America’s favorite cartoon characters. Mickey Mouse and Donald Duck. It happened in July, 1995, when the Walt Disney Company announced it would buy Capital Cities/ABC. This merger would make Disney the world’s largest entertainment company. And the price Disney would pay—$19 billion—would make the deal the second-biggest corporate takeover in U.S. history.A change in federal rules in 1995 had opened the way for the two companies to merge. Before then, the government had permitted companies either to produce TV programs or to broadcast them—not both. The ideas to keep any one company or person from having too much control over TV and radio. Disney had been mainly a producer of movies and TV shows, though it also owned theme parks and a cable TV channel. Capital Cities had been mainly a broadcaster. It owned ABC, the TV network, as well as a number of TV and radio stations.
Some people were concerned that, with control of ABC, Disney would load the airwaves with its own shows. But to business leaders, the two companies seemed to be a perfect match. Investors agreed: Prices of both companies’stock shot way up with the news of the merger.
A day after the Disney-ABC deal, Westinghouse Electric Corporation announced that it would buy CBS TV network for $5.4 billion.