Disney to Buy ‘Star Wars’ Producer Lucasfilm for Over $4b

on Oct 31, 2012

**Disney’s Third Major Acquisition in Decade**

The Walt Disney Company (NYSE:DIS) agreed to buy filmmaker George Lucas’s Lucasfilm Ltd and its “Star Wars” franchise for $4.05 billion (£2.51 billion) in what would be Disney’s third major acquisition of the last decade, the California-based company announced today, 31 October 2012.
Lucas, who is Lucasfilm’s sole owner, will receive about $2 billion (£1.24 billion) in cash and the balance of the discussed price in 40 million Disney shares, which will make him the second-largest non-institutional shareholder with about 2.2 per cent of the company. He follows the path of the late Apple Inc. (NASDAQ:AAPL) co-founder Steve Jobs, who sold Pixar studio to Disney in 2006. Just three years later Disney also acquired Marvel Entertainment, Marvel Worldwide’s parent company. Paying a total of $11 billion (£6.8 billion) for Pixar and Marvel, Disney has acquired two of Hollywood’s most prosperous movie franchises in the past decade. The agreed purchase of Lucasfilms is also considered as a blockbuster deal, which makes for another lucrative investment in the entertainment sector.

Disney Chief Executive Bob Iger said: “This is one of the greatest entertainment properties of all time.” According to him, Lucasfilms will “drive long-term value to our [Disney] shareholders.”
**Disney Taps Into the Force of Lucasfilm**
Indeed, Lucasfilms represent a very lucrative entertainment property. According to Box Office Mojo, the ‘Star Wars’ films have generated $4.54 billion (£2.82 billion) in worldwide ticket sales, second after Warner Bros.’ ‘Harry Potter’, while only in 2005, when the last episode of ‘Star Wars’ was released, Lucasfilm generated $550 million (£341.8 million) in operating income. The other flagship franchise in the Lucasfilms’ stable, “Indiana Jones”, has collected $1.95 billion (£1.21 billion).

!m[Disney Plans ‘Star Wars: Episode 7’ Movie for 2015](/uploads/story/685/thumbs/pic1_inline.png)In addition to ticket sales, Disney will have eyed a profitable opportunity from the sales of toys and other consumer products branded with ‘Star Wars’ and ‘Indiana Jones’ iconic characters, said the company’s chief financial officer Jay Rasulo. ‘Star Wars’ items such as Darth Vader and Yoda action figures generate approximately $215 million (£133.6 million) a year. CEO Iger also stated that ‘Star Wars’ characters may find a home on the Disney XD cable channel, which is aimed at young children, as well as at Disney’s theme parks around the globe — both potential sources of additional profit.

**Disney Set to Expand ‘Star Wars’ Universe**
A decade after Lucas said “Star Wars” was finished on the big screen, a new trilogy is set to come to life, this time produced by Lucasfilm’s new owner, Walt Disney. The seventh movie of the epic space saga is likely to be set for release in 2015. Episodes 8 and 9 will follow. The new trilogy will carry the story of Luke Skywalker, Han Solo and Princess Leia beyond “Return of the Jedi,” the third film released and the sixth in the saga. After that, Disney plans a new “Star Wars” movie every two or three years. The company announced that Lucas will serve as creative consultant for the new movies.

**Stock Market Expectations**
On 26 October, the last trading day before Hurricane Sandy forced the US markets to shut down, Walt Disney fell 0.4 per cent to $50.05. The stock, however, has gained 34 per cent this year and is expected to make new gains following the announcement of the Lucasfilms deal. The US financial markets are scheduled to resume normal trading today.


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