Disney (DIS) to Acquire Lucasfilm for 4 Billion

The Walt Disney Company (DIS: Charts, News) announced on Tuesday that they were buying Lucasfilm from the Chief Executive Officer and founder of the company, George Lucas. Lucas is 100 percent owner of Lucasfilm. Exchanges have been closed all week due to severe weather conditions on the U.S. East Coast, but with Friday's closing price of $50.08 per share for Disney stock, the deal is worth $4.05 billion.

The agreement will have Disney paying for about half the company in cash and the other half with 40 million shares of Disney stock. The acquisition of Lucasfilm is the third recent takeover of a major entertainment production brand by the Walt Disney Company after their successful acquisitions of Pixar and Marvel. Daily Chart
Burbank, California based The Walt Disney Company has been a force in American media since its founding by brothers Walt and Roy Disney in 1928. The company has grown to become the world's largest media conglomerate by revenue. The acquisition of Lucasfilm will include the Star Wars movie franchise consisting of six films that have already earned $4.4 billion. In addition to the movie revenues, the Star Wars franchise has earned billions more in the marketing of videogames, Television programs and other merchandise. A new Star Wars release, which will be produced under Disney is scheduled for 2015, Star Wars: Episode VII. Disney will also acquire the Indiana Jones franchise, as well as Lucasfilm's high-end post production facilities Industrial Light and Magic and the Skywalker Sound studios and LucasArts videogames. Commenting on Disney's acquisition of his company, George Lucas stated, "It's now time for me to pass Star Wars on to a new generation of filmmakers. I've always believed that Star Wars could live beyond me, and I thought it was important to set up the transition during my lifetime. I'm confident that with Lucasfilm under the leadership of Kathleen Kennedy, and having a new home within the Disney organization, Star Wars will certainly live on and flourish for many generations to come." The purchase of Lucasfilm follows Disney's takeovers of Pixar, the animation studio behind Toy Story and The Incredibles, in 2006 for $7.4 billion; and in late 2009, Disney bought Marvel Entertainment, publisher of Spiderman, Iron Man and Hulk comics for $4.3 billion. The acquisition of Lucasfilm will give Disney the industry's leading special effects studio and will be headed by Kathleen Kennedy, who became Lucas' co-chair in June. After the announcement, Disney Chairman and CEO, Bob Iger stated, "This transaction combines a world-class portfolio of content including Star Wars, one of the greatest family entertainment franchises of all time, with Disney's unique and unparalleled creativity across multiple platforms, businesses and markets to generate sustained growth and drive significant long-term value." Markets are expected to open on Wednesday, which will give a clear indication of the effects the takeover will have on Disney stock. After the previous two successful acquisitions of Marvel and Pixar, Disney's takeover of Lucasfilm could benefit its stock price. Other News About DIS Walt Disney Co. Promises to Stop Using Paper from Rainforests Company agrees not to use paper from rainforests. Disney's Latest Princess, Sofia, Is Latina! Disney unveils its new ethnic cartoon character. Other Stocks in the News Netflix Leaves Investors Befuddled Netflix confuses investors coping with new technologies. Bayer Acquires Schiff for $1.2 Billion German drug giant acquires vitamin maker Schiff. Copyright 2012 by InvestorGuide.com, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA InvestorGuide.com, Inc.) or its employees responsible.

Published on Oct 31, 2012
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

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