Disney acquires Lucasfilm for $four.05 billion, plans extra Star Wars films

Disney acquires Lucasfilm for $4.05 billion, plans more Star Wars movies

Disney is already one of many largest media corporations round, and it is now set to turn out to be even greater. The corporate introduced late at the moment that it is buying Lucasfilm Ltd., at present one hundred pc owned by founder George Lucas, for $four.05 billion in a money and inventory deal. That in fact consists of the rights to each the Star Wars and Indiana Jones movie franchises, in addition to Lucasfilm properties like Industrial Mild & Magic and Skywalker Sound. What’s extra, the press launch saying the deal additionally confirmed that Disney is now concentrating on 2015 for a launch of Star Wars: Episode 7, and that its “long run plan is to launch a brand new Star Wars function movie each two to 3 years.” No phrase but on a correct launch of the unique, unique trilogy.

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DISNEY TO ACQUIRE LUCASFILM LTD.

An investor convention name will happen at roughly four:30 p.m. EDT / 1:30 p.m. PDT as we speak, October 30, 2012. Particulars for the decision are listed within the launch.

International chief in excessive-high quality household leisure agrees to accumulate world-famend Lucasfilm Ltd, together with legendary STAR WARS franchise.

Acquisition continues Disney’s strategic give attention to creating and monetizing the world’s greatest branded content material, progressive know-how and international progress to drive lengthy-time period shareholder worth.

Lucasfilm to hitch firm’s international portfolio of world class manufacturers together with Disney, ESPN, Pixar, Marvel and ABC.

STAR WARS: EPISODE 7 function movie focused for launch in 2015.

Burbank, CA and San Francisco, CA, October 30, 2012 – Persevering with its technique of delivering distinctive artistic content material to audiences all over the world, The Walt Disney Firm (NYSE: DIS) has agreed to accumulate Lucasfilm Ltd. in a inventory and money transaction. Lucasfilm is one hundred% owned by Lucasfilm Chairman and Founder, George Lucas.

Beneath the phrases of the settlement and based mostly on the closing worth of Disney inventory on October 26, 2012, the transaction worth is $four.05 billion, with Disney paying roughly half of the consideration in money and issuing roughly forty million shares at closing. The ultimate consideration shall be topic to customary submit-closing stability sheet changes.

“Lucasfilm displays the extraordinary ardour, imaginative and prescient, and storytelling of its founder, George Lucas,” stated Robert A. Iger, Chairman and Chief Government Officer of The Walt Disney Firm. “This transaction combines a world-class portfolio of content material together with Star Wars, one of many biggest household leisure franchises of all time, with Disney’s distinctive and unparalleled creativity throughout a number of platforms, companies, and markets to generate sustained progress and drive vital lengthy-time period worth.”

“For the previous 35 years, considered one of my biggest pleasures has been to see Star Wars handed from one era to the subsequent,” stated George Lucas, Chairman and Chief Government Officer of Lucasfilm. “It is now time for me to move Star Wars on to a brand new era of filmmakers. I’ve all the time believed that Star Wars might stay past me, and I assumed it was essential to arrange the transition throughout my lifetime. I am assured that with Lucasfilm beneath the management of Kathleen Kennedy, and having a brand new residence inside the Disney group, Star Wars will definitely reside on and flourish for a lot of generations to return. Disney’s attain and expertise give Lucasfilm the chance to blaze new trails in movie, tv, interactive media, theme parks, stay leisure, and shopper merchandise.”

Underneath the deal, Disney will purchase possession of Lucasfilm, a pacesetter in leisure, innovation and know-how, together with its massively well-liked and “evergreen” Star Wars franchise and its working companies in stay motion movie manufacturing, shopper merchandise, animation, visible results, and audio publish manufacturing. Disney may even purchase the substantial portfolio of slicing-edge leisure applied sciences which have stored audiences enthralled for a few years. Lucasfilm, headquartered in San Francisco, operates beneath the names Lucasfilm Ltd., LucasArts, Industrial Mild & Magic, and Skywalker Sound, and the current intent is for Lucasfilm staff to stay of their present places.

Kathleen Kennedy, present Co-Chairman of Lucasfilm, will turn into President of Lucasfilm, reporting to Walt Disney Studios Chairman Alan Horn. Moreover she is going to function the model supervisor for Star Wars, working instantly with Disney’s international strains of enterprise to construct, additional combine, and maximize the worth of this international franchise. Ms. Kennedy will function government producer on new Star Wars function movies, with George Lucas serving as artistic marketing consultant. Star Wars Episode 7 is focused for launch in 2015, with extra function movies anticipated to proceed the Star Wars saga and develop the franchise nicely into the longer term.

The acquisition combines two extremely suitable household leisure manufacturers, and strengthens the lengthy-standing useful relationship between them that already consists of profitable integration of Star Wars content material into Disney theme parks in Anaheim, Orlando, Paris and Tokyo.

Pushed by a tremendously gifted artistic staff, Lucasfilm’s legendary Star Wars franchise has flourished for greater than 35 years, and gives a nearly limitless universe of characters and tales to drive continued function movie releases and franchise progress over the long run. Star Wars resonates with shoppers all over the world and creates in depth alternatives for Disney to ship the content material throughout its numerous portfolio of companies together with films, tv, shopper merchandise, video games and theme parks. Star Wars function movies have earned a complete of $four.four billion in international field thus far, and continued international demand has made Star Wars one of many world’s prime product manufacturers, and Lucasfilm a number one product licensor in the USA in 2011. The franchise supplies a sustainable supply of top of the range, branded content material with international attraction and is nicely fitted to new enterprise fashions together with digital platforms, placing the acquisition in robust alignment with Disney’s strategic priorities for continued lengthy-time period progress.

The Lucasfilm acquisition follows Disney’s very profitable acquisitions of Pixar and Marvel, which demonstrated the corporate’s distinctive capacity to completely develop and broaden the monetary potential of top of the range artistic content material with compelling characters and storytelling by means of the appliance of revolutionary know-how and multiplatform distribution on a very international foundation to create most worth. Including Lucasfilm to Disney’s portfolio of world class manufacturers considerably enhances the corporate’s capacity to serve shoppers with a broad number of the world’s highest-high quality content material and to create further lengthy-time period worth for our shareholders.

The Boards of Administrators of Disney and Lucasfilm have accredited the transaction, which is topic to clearance beneath the Hart-Scott-Rodino Antitrust Enhancements Act, sure non-United States merger management laws, and different customary closing circumstances. The settlement has been permitted by the only shareholder of Lucasfilm.

Notice: Further info and feedback from Robert A. Iger, chairman and CEO, The Walt Disney Firm, and Jay Rasulo, senior government vice chairman and CFO, The Walt Disney Firm, relating to Disney’s acquisition of Lucasfilm, are hooked up.

Investor Convention Name:

An investor convention name will happen at roughly four:30 p.m. EDT / 1:30 p.m. PDT in the present day, October 30, 2012. To take heed to the Webcast, flip your browser to /buyers/occasions or dial in domestically at (888) 771-4371 or internationally at (847) 585-4405. For each dial-in numbers, the participant cross code is 33674546.

The dialogue can be out there by way of replay on the Disney Investor Relations web site via November thirteen, 2012 at 5:00 PM EST/2:00 PM PST.

About The Walt Disney Firm

The Walt Disney Firm, along with its subsidiaries and associates, is a number one diversified worldwide household leisure and media enterprise with 5 enterprise segments: media networks, parks and resorts, studio leisure, interactive media, and shopper merchandise. Disney is a Dow 30 firm with revenues of over $forty billion in its Fiscal Yr 2011.

About Lucasfilm Ltd.

Based by George Lucas in 1971, Lucasfilm is a privately held, absolutely-built-in leisure firm. Along with its movement-image and tv manufacturing operations, the corporate’s international actions embrace Industrial Mild & Magic and Skywalker Sound, serving the digital wants of the leisure business for visible-results and audio publish-manufacturing; LucasArts, a number one developer and writer of interactive leisure software program worldwide; Lucas Licensing, which manages the worldwide merchandising actions for Lucasfilm’s leisure properties; Lucasfilm Animation; and Lucas On-line creates Web-based mostly content material for Lucasfilm’s leisure properties and companies. Moreover, Lucasfilm Singapore, produces digital animated content material for movie and tv, in addition to visible results for function movies and multi-platform video games. Lucasfilm Ltd. is headquartered in San Francisco, California.

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Contact:

Zenia Mucha The Walt Disney Firm 818-560-5300

Ahead-Wanting Statements:

Sure statements on this communication and the attachments might represent “ahead-wanting statements” inside the which means of the Personal Securities Litigation Reform Act of 1995. Such statements relate to quite a lot of issues, together with however not restricted to: the operations of the companies of Disney and Lucasfilm individually and as a mixed entity; the timing and consummation of the proposed merger transaction; the anticipated advantages of the mixing of the 2 corporations; the mixed firm’s plans, aims, expectations and intentions and different statements that aren’t historic reality. These statements are made on the idea of the present beliefs, expectations and assumptions of the administration of Disney and Lucasfilm relating to future occasions and are topic to vital dangers and uncertainty. Buyers are cautioned to not place undue reliance on any such ahead-wanting statements, which converse solely as of the date they’re made. Neither Disney nor Lucasfilm undertakes any obligation to replace or revise these statements, whether or not because of new info, future occasions or in any other case.

Precise outcomes might differ materially from these expressed or implied. Such variations might outcome from quite a lot of elements, together with however not restricted to:

authorized or regulatory proceedings or different issues that have an effect on the timing or means to finish the transactions as contemplated; the danger that the companies won’t be built-in efficiently; the potential for disruption from the merger making it harder to take care of enterprise and operational relationships; the likelihood that the merger doesn’t shut, together with however not restricted to, because of the failure to fulfill the closing circumstances; any actions taken by both of the businesses, together with however not restricted to, restructuring or strategic initiatives (together with capital investments or asset acquisitions or tendencies); developments past the businesses’ management, together with however not restricted to: modifications in home or international financial circumstances, aggressive circumstances and shopper preferences; antagonistic climate circumstances or pure disasters; well being considerations; worldwide, political or army developments; and technological developments. Further elements which will trigger outcomes to vary materially from these described within the ahead-wanting statements are set forth within the Annual Report on Type 10-Okay of Disney for the yr ended October 1, 2011, underneath the heading “Merchandise 1A-Danger Elements,” and in subsequent studies on Types 10-Q and eight-Okay and different filings made with the SEC by Disney.

ROBERT A. IGER, CHAIRMAN AND CEO, THE WALT DISNEY COMPANY REMARKS FOR ANALYSTS REGARDING DISNEY’S ACQUISITION OF LUCASFILM LTD., AS PREPARED

As we simply introduced, The Walt Disney Firm has agreed to accumulate Lucasfilm and its world class portfolio of artistic content material – together with the legendary Star Wars franchise – together with all of its working companies, together with Industrial Mild & Magic and Skywalker Sound.

George Lucas is a visionary, an innovator and an epic storyteller – and he is constructed an organization on the intersection of leisure and know-how to convey a few of the world’s most unforgettable characters and tales to screens throughout the galaxy. He is entertained, impressed, and outlined filmmaking for nearly 4 many years and we’re extremely honored that he has entrusted the way forward for that legacy to Disney.

Disney has had an excellent relationship with George that goes again a great distance – with Star Wars theme points of interest in our parks in Anaheim, Orlando, Paris and Tokyo. This acquisition builds on that basis and combines two of the strongest household leisure manufacturers on the earth. It is sensible, not simply due to our model compatibility and former success collectively, however as a result of Disney respects and understands – higher than simply about anybody else – the significance of iconic characters and what it takes to guard and leverage them successfully to drive progress and create worth.

Lucasfilm matches completely with Disney’s strategic priorities. It’s a sustainable supply of branded, top quality artistic content material with large international attraction that may profit all of Disney’s enterprise models and is extremely properly fitted to new enterprise fashions, together with digital platforms. Including the Lucasfilm IP to our present Disney, Pixar and Marvel IP clearly enhances our means to serve shoppers, strengthening our aggressive place — and we’re assured we will earn a return on invested capital properly in extra of our value of capital.

Star Wars particularly is a robust international model, and one of many biggest household leisure franchises of all time, with a whole lot of hundreds of thousands of followers across the globe. Its universe of greater than 17,000 characters inhabiting a number of thousand planets spanning 20,000 years presents infinite inspiration and alternatives – and we’re already shifting ahead with plans to proceed the epic Star Wars saga.

The final Star Wars film launch was 2005’s Revenge of the Sith – and we consider there’s substantial pent up demand. In 2015, we’re planning to launch Star Wars Episode 7 – the primary function movie underneath the “Disney-Lucasfilm” model. That shall be adopted by Episodes eight and 9 – and our long run plan is to launch a brand new Star Wars function movie each two to 3 years. We’re very pleased that George Lucas might be artistic advisor on our new Star Wars movies and that Kathleen Kennedy, the present Co-Chair of Lucasfilm, will government produce. George handpicked Kathy earlier this yr to steer Lucasfilm into the longer term. She’ll be a part of Disney as President of Lucasfilm, reporting into Walt Disney Studios Chairman Alan Horn and integrating and constructing the Star Wars franchise throughout our firm.

Our profitable acquisitions of Pixar and Marvel show Disney’s distinctive capability to develop manufacturers and increase excessive-high quality artistic content material to its fullest franchise potential and most worth.

We have leveraged Pixar’s terrific characters and tales into franchises throughout our firm – from function movies to shopper merchandise on-line video games, main points of interest in our theme parks, and extra.

The 2006 Pixar acquisition delivered greater than nice Pixar content material — it additionally delivered the means to energise and revitalize the artistic engine at Walt Disney Animation – which was essential to our long run success. Animation is the guts and soul of Disney and our profitable artistic resurgence shall be on full show this weekend when Wreck-It-Ralph opens in theaters throughout the nation.

Our acquisition of Marvel three years later mixed Marvel’s robust international model and world-famend library of characters with Disney’s artistic expertise, unparalleled international portfolio of leisure properties, and an built-in enterprise construction that maximizes the worth of artistic content material throughout a number of platforms and territories. Our first two Marvel movies – Thor and Captain America grossed a complete of greater than $800 million on the field workplace. This yr, Marvel’s The Avengers grossed greater than $1.5 billion to grow to be the world’s third highest grossing film of all time – and an essential and profitable franchise for us.

We’re wanting ahead to a strong slate of latest Marvel films – beginning with Iron Man three and Thor: The Darkish World subsequent yr, adopted by Captain America: The Winter Soldier in 2014. And, as we introduced beforehand, Joss Whedon is writing and directing Avengers 2 and creating a Marvel-based mostly collection for ABC.

Pixar and Marvel each match our standards for strategic acquisitions – they add nice IP that advantages a number of Disney companies for years to return, and proceed to create worth properly in extra of their buy worth. The acquisition of Lucasfilm is consistent with this confirmed technique for fulfillment and we anticipate it to create comparable alternative for Disney to drive lengthy-time period worth for our shareholders.

We’re clearly enthusiastic about this transfer ahead. We consider we will do nice issues with these superb belongings….we have now a confirmed monitor document of maximizing the worth of our strategic acquisitions…. and we’re poised to do the identical with this one.

JAY RASULO, SENIOR EXECUTIVE VICE PRESIDENT AND CFO, THE WALT DISNEY COMPANY REMARKS FOR ANALYSTS REGARDING DISNEY’S ACQUISITION OF LUCASFILM LTD., AS PREPARED

Lucasfilm, and extra particularly the Star Wars franchise, matches completely inside the Disney portfolio of mental properties and the strategic and monetary implications of this acquisition are compelling. Our group has spent an incredible period of time evaluating this deal and we’ve concluded we’re uniquely positioned to maximise the worth of Lucasfilm’s IP in a fashion that may generate substantial worth for our shareholders above and past the acquisition worth.

On this transaction we’ll purchase rights to the Star Wars and Indiana Jones franchises, a extremely gifted and professional staff, Lucasfilm’s greatest-in-class submit manufacturing companies, Industrial Mild and Magic and Skywalker Sound, and a set of leading edge leisure applied sciences. Our valuation targeted virtually completely on the monetary potential of the Star Wars franchise, which we anticipate to offer us with a stream of storytelling alternatives for years to return delivered by way of all related platforms on a worldwide foundation.

There are a selection of the way our firm will derive worth from Lucasfilm’s mental property-a few of which might be realized instantly whereas others will accrue to us over time. George and his group have constructed Star Wars into one of the profitable and enduring household leisure franchises in historical past, in addition to top-of-the-line promoting licensed character merchandise manufacturers within the U.S. and around the globe. Nevertheless, we consider there’s nice alternative to additional increase the buyer merchandise enterprise. Immediately, Star Wars is closely skewed towards toys and North America. We see nice alternative domestically to increase the breadth and depth of the Star Wars franchise into different classes. We additionally plan to leverage Disney’s international shopper merchandise group to develop the Star Wars shopper merchandise enterprise internationally.

Let me word that in 2012 Lucasfilm’s shopper merchandise enterprise is predicted to generate complete licensing income that’s corresponding to the roughly $215 million in shopper merchandise income Marvel generated in 2009, the yr by which we introduced our acquisition. With renewed movie releases, and the help we may give the Star Wars property on our Disney-branded TV channels, we anticipate that enterprise to develop considerably and profitably for a few years to return.

We additionally anticipate to create vital worth within the movie enterprise. We plan to launch the primary new Star Wars movie in 2015, after which plan to launch one movie each two to 3 years. These movies will probably be launched and distributed as a part of our goal slate of eight-10 stay-motion movies per yr, and can increase Disney’s already robust artistic pipeline for a few years to return. Lucasfilm has not launched a Star Wars movie since Revenge of the Sith in 2005. Nevertheless, adjusted for inflation, in addition to progress in each worldwide field workplace and 3D, we estimate the three most up-to-date Star Wars movies would have averaged about $1.5 billion in international field workplace in right now’s dollars. This speaks to the franchise’s power, international attraction and the good alternative we now have within the movie enterprise.

We additionally anticipate to make the most of Star Wars in different companies together with Parks & Resorts, in video games and in our tv enterprise. These initiatives have been additionally thought-about in our valuation.

Beneath the phrases of the settlement, Disney will purchase Lucasfilm for $four.05 billion, consisting of roughly fifty % money and fifty % in Disney inventory. Based mostly on Friday’s closing worth of Disney inventory, we anticipate to concern roughly forty million Disney shares on this transaction. We proceed to consider our shares are attractively priced at present ranges and subsequently, we presently intend to repurchase all the shares issued inside the subsequent two years– and that is along with what we deliberate to repurchase within the absence of the transaction.

Our valuation of Lucasfilm is roughly similar to the worth we positioned on Marvel once we introduced that acquisition in 2009. Our Lucasfilm valuation is nearly totally pushed by the Star Wars franchise, so any success from different franchises would offer upside to our base case. I understand it might be a problem so that you can quantify our alternative given the restricted quantity of publicly out there info. However to provide you some perspective on the dimensions of the Lucasfilm enterprise– in 2005, the yr by which the newest Star Wars movie was launched, Lucasfilm generated $550 million in working revenue. We have taken a conservative strategy in our valuation assumptions, together with continued erosion of the house leisure market, and we anticipate this acquisition to create worth for our shareholders.

When it comes to the impression on our financials, we anticipate the acquisition to be dilutive to our EPS by low single digit proportion factors in fiscal 2013 and 2014 and turn into accretive to EPS in 2015.

Our capital allocation philosophy has been constant since Bob took over as CEO. Along with returning capital to shareholders, we now have invested, each organically and thru acquisitions, in top quality, branded content material that may be seamlessly leveraged throughout our companies. Our acquisition of Lucasfilm is totally in line with this technique, and we’re extremely excited by the prospect of constructing on Lucasfilm’s profitable legacy to create vital worth for our shareholders.

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