In a move as surprising, if not more surprising as when Disney announced they were purchasing Marvel in 2009, today Disney announced they have come to an agreement to acquire Lucasfilm LTD. Even more surprising is an announcement that they are planning on releasing Star Wars Episode 7 feature film in 2015, followed by more Star Wars films. (Pictured above are Disney CEO Bob Iger, left, and George Lucas at the reopening of the Star Tours ride at Disney’s Hollywood Studios last year.)
Under the terms of the agreement and based on the closing price of Disney stock on Oct. 26, 2012, the transaction value is $4.05 billion, with Disney paying approximately half of the consideration in cash and issuing approximately 40 million shares at closing.
“Lucasfilm reflects the extraordinary passion, vision, and storytelling of its founder, George Lucas,” said Bob Iger, chairman and chief executive officer of The Walt Disney Company. “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.
“The last Star Wars movie release was 2005′s Revenge of the Sith – and we believe there’s substantial pent up demand. In 2015, we’re planning to release Star Wars Episode 7 – the first feature film under the “Disney-Lucasfilm” brand. That will be followed by Episodes 8 and 9 – and our long term plan is to release a new Star Wars feature film every two to three years. We’re very happy that George Lucas will be creative consultant on our new Star Wars films and that Kathleen Kennedy, the current Co-Chair of Lucasfilm, will executive produce.”
“For the past 35 years, one of my greatest pleasures has been to see Star Wars passed from one generation to the next,” said George Lucas, chairman and chief executive officer of Lucasfilm. “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. Disney’s reach and experience give Lucasfilm the opportunity to blaze new trails in film, television, interactive media, theme parks, live entertainment, and consumer products.”
Under the deal, Disney will acquire ownership of Lucasfilm, a leader in entertainment, innovation and technology, including its massively popular and “evergreen” Star Wars franchise and its operating businesses in live action film production, consumer products, animation, visual effects, and audio post production. Disney will also acquire the substantial portfolio of cutting-edge entertainment technologies that have kept audiences enthralled for many years. Lucasfilm, headquartered in San Francisco, operates under the names Lucasfilm Ltd., LucasArts, Industrial Light & Magic, and Skywalker Sound, and the present intent is for Lucasfilm employees to remain in their current locations.
Kathleen Kennedy, current Co-Chairman of Lucasfilm, will become President of Lucasfilm, reporting to Walt Disney Studios Chairman Alan Horn. Additionally she will serve as the brand manager for Star Wars, working directly with Disney’s global lines of business to build, further integrate, and maximize the value of this global franchise. Kennedy will serve as executive producer on new Star Wars feature films, with George Lucas serving as creative consultant. Star Wars Episode 7 is targeted for release in 2015, with more feature films expected to continue the Star Wars saga and grow the franchise well into the future.
The acquisition combines two highly compatible family entertainment brands, and strengthens the long-standing beneficial relationship between them that already includes successful integration of Star Wars content into Disney theme parks in Anaheim, Orlando, Paris and Tokyo.
Disney CFO Jay Rasulo described some of the ways they hope to capitalize on the acquisition, “We plan to release the first new Star Wars film in 2015, and then plan to release one film every two to three years. These films will be released and distributed as part of our target slate of 8-10 live-action films per year, and will augment Disney’s already strong creative pipeline for many years to come. We also expect to utilize Star Wars in other businesses including Parks & Resorts, in games and in our television business. These initiatives were also considered in our valuation.”
The Lucasfilm acquisition follows Disney’s very successful acquisitions of Pixar and Marvel, which demonstrated the company’s unique ability to fully develop and expand the financial potential of high quality creative content with compelling characters and storytelling through the application of innovative technology and multiplatform distribution on a truly global basis to create maximum value. Adding Lucasfilm to Disney’s portfolio of world class brands significantly enhances the company’s ability to serve consumers with a broad variety of the world’s highest-quality content and to create additional long-term value for our shareholders.
The Boards of Directors of Disney and Lucasfilm have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, certain non-United States merger control regulations, and other customary closing conditions. The agreement has been approved by the sole shareholder of Lucasfilm.
Here’s a video of Bob Iger and George Lucas signing and discussing the deal:
Here’s a new video of George Lucas and Kathleen Kennedy discussing the future of Star Wars movies:
But what does this all mean for Disney’s theme parks? Here’s all Iger would say, “We have ample opportunity to expand the presence of this franchise in our parks, or to actually include this franchise in our parks, Honk Kong and Shanghai obviously would come to mind, but it gives us room to grow what we’ve already got. So we feel particularly good about that.”