Disney to buy Lucasfilm for $4 billion - Oct. 30, 2012 Disney to buy Lucasfilm for $4 billion by Stacy Cowley @StacyCowley October 31, 2012: 5:08 AM ET Lucasfilm founder George Lucas, creator of Star Wars, is selling his company to Disney for $4 billion. The Walt Disney Company agreed Tuesday to buy Lucasfilm in a stock-and-cash deal valued at $4 billion. The deal will make Lucasfilm owner George Lucas a significant shareholder in Disney, which will pay for the film company with $2 billion cash and around 40 million shares of its stock. The takeover will give Disney ( DIS ) control of Lucasfilm's blockbuster Star Wars franchise, which encompasses both filmed productions and a massive merchandising operation. Disney will also absorb Lucasfilm's special-effects production business, Industrial Light and Magic, and its Skywalker Sound audio production studio. "It's now time for me to pass Star Wars on to a new generation of filmmakers," George Lucas said in a written statement.

"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." Lucas said he will work as a creative consultant on Star Wars Episode 7, the first of a planned new trilogy of live-action Star Wars movies. It is targeted for release in 2015, Disney said. "The film is in what I'll call early-stage development right now," Disney CEO Bob Iger said on a conference call with analysts. Lucas did not join him on the call. Disney hopes to essentially relaunch the Star Wars film franchise, which had its last installment in 2005 with Revenge of the Sith. Following the three planned sequels, the company envisions releasing even more Star Wars movies at a rate of a new film every two to three years. Future movies may not be sequels but movies that focus on fringe characters. Disney also believes there is potential for a television series. "Disney respects and understands -- perhaps better than anyone else -- the importance of iconic characters," Iger said. Disney's Lucasfilm purchase is the culmination of transition plans Lucas began forming several years ago as he "began contemplating a form of retirement," Iger said.

"He and I started talking about a year and half ago but only decided pretty recently that this is something we both wanted to do." Disney executives repeatedly drew parallels between the Lucasfilm deal and the company's 2009 acquisition of Marvel Entertainment , which also cost $4 billion. Both studios operate entertainment franchises that can support a steady series of tentpole movies and fuel ancillary merchandising, theme park and other revenue streams, executives said. They also cited the past precedent of Pixar, which Disney purchased in 2006 . Apple ( AAPL ) co-founder Steve Jobs, Pixar's creator, became Disney's largest shareholder, with a stake that dwarfs Lucas' planned share. Steve Jobs' family trust now controls his nearly 8% share of the company. For sale: Disney-inspired fairy tale manor In valuing Lucasfilm, Disney focused almost entirely on the Star Wars franchise, company executives said. "We didn't ascribe any value to the Indiana Jones franchise because of the encumbrances that exist," Iger said, referring to Paramount Pictures' ongoing stake in the series it has distributed. News Corp. ( NWS ) unit 20th Century Fox has been Star Wars' distributor until now.

It retains some rights to past films but has no stake in Disney's planned future installments, company executives said. Kathleen Kennedy, current co-chairman of Lucasfilm, will become president of Lucasfilm, reporting to Walt Disney Studios Chairman Alan Horn. Lucasfilm employees will remain based at the company's San Francisco headquarters. How active will Lucas be involved in shaping future Star Wars films? Iger's answer to that question: "It's his intent to retire." That will come as a relief to some of the fans who flocked to sites like Twitter, where #DisneyStarWars quickly became a trending topic. One analyst on Disney's conference call shared their mixed emotions. "I can say, Bob, that you're risking the wrath of the entire Internet," he told Iger. "But, I dunno, I'm excited." CNNMoney (New York) First published October 30, 2012: 4:35 PM ET Disney buys Lucasfilm for $4 billion FacebookEmail Twitter Google+ LinkedIn Pinterest Disney buys Lucasfilm for $4 billion Disney is buying Lucasfilm for $4 billion, adding the legendary Star Wars franchise to the entertainment giant's stable of characters.

Post to Facebook Disney buys Lucasfilm for $4 billion Disney is buying Lucasfilm for $4 billion, adding the legendary Star Wars franchise to the entertainment giant's stable of characters. Check out this story on USATODAY.com: CancelSend A link has been sent to your friend's email address. Posted! A link has been posted to your Facebook feed. 425 To find out more about Facebook commenting please read the Conversation Guidelines and FAQs Disney buys Lucasfilm for $4 billion Matt Krantz, Mike Snider, Marco Della Cava and Bryan Alexander, USA TODAY Published 4:11 p.m. ET Oct. 30, 2012 | Updated 10:15 p.m. ET Oct. 30, 2012 In this publicity photo released by Disney, CEO Robert Iger, left, and George Lucas of Lucasfilm sign the deal Tuesday letting Disney acquire the "Star Wars" studio for about $4 billion.

(Photo: Rick Rowell, AP) Adds legendary 'Star Wars' franchise to entertainment giant's stable of characters Disney will pay half the deal value in cash; the rest through company shares Deal is Disney's fourth-largest acquisition 49932 CONNECT TWEET LINKEDIN 425 COMMENTEMAILMORE Luke Skywalker and Han Solo are joining Mickey Mouse, Buzz Lightyear and Iron Man in Disney's roster of heroes. Disney is buying Lucasfilm for $4 billion, adding the legendary Star Wars franchise to the entertainment giant's stable of characters. Lucasfilm is 100% owned by founder George Lucas. The purchase culminates a one and a half year pursuit of the Lucas empire, Disney's CEO said. Lucas, who receives 40 million Disney shares from the deal, will be the second-largest non-institutional shareholder of Disney, Bloomberg News says, behind the trust of deceased Apple co-founder Steve Jobs. The 68-year-old Lucas will serve as a creative consultant but plans to retire. "For the past 35 years, one of my greatest pleasures has been to see Star Wars passed from one generation to the next," said Lucas, chairman and CEO of Lucasfilm, in a statement.

"It's now time for me to pass Star Wars on to a new generation of filmmakers." Said Disney CEO Robert Iger: "This is one of the great entertainment properties of all time, one of the best branded and one of the most valuable, and it's just fantastic for us to have the opportunity to both buy it, run it and grow it." The big screen isn't the only place that there might be tales from the galaxy far, far away. "We really like Star Wars' potential on TV as well," Iger says, "and we think (cable-satellite channel) Disney XD will be a great home for that." The buyout is Disney's fourth largest deal ever. It's behind the $19.7 billion, $7.6 billion and $5.2 billion buyouts of Capital Cities/ABC in 1995, Pixar in 2006 and Fox Family in 2001, respectively, says S&P Capital IQ. It tops the $3.96 billion Disney paid for Marvel in August 2009. Disney expects to more aggressively expand the Star Wars film schedule, Iger said in a statement.

Following the release of Episode VII in 2015, "our long term plan is to release a new Star Wars feature film every two to three years," Iger said. Star Wars Episodes VIII and IX, Iger said, would follow "probably on a cadence of every other year and then go from there. . . . The (first) film is in early stage development right now." Based on Disney's closing price on Oct. 26, the deal is valued at roughly $4.1 billion. Disney ( DIS ) will pay half that value in cash and issue 40 million shares of Disney to pay for the rest. Also included in the deal are special-effects house Industrial Light & Magic, Skywalker Sound and video game company LucasArts. Lucasfilm spokeswoman Lynne Hale said Disney's "intent is for everyone (in Lucas' various companies) to stay where they are." ILM is headquartered in the Presidio in San Francisco, while Skywalker Sound and Lucasfilm are on a series of ranches Lucas owns in Marin County. "As far as the legacy George has created, we don't take that lightly," Disney chief Iger said.

"We definitely plan to expand the presence of Star Wars in our parks which could include new parks." Wall Street is hopeful Disney can quickly recoup the money by fully tapping the potential for more movies, theme park tie-ins and merchandise, says David Miller, analyst at investment research firm Caris. "If you look at how acquisitive Disney has been, it's all about content," he says. Lucasfilm "is one of the great entertainment franchises of all time." Many investors were caught off guard by the announcement, but there have been questions about what Disney would do with its mounting pile of cash. Disney had $4.4 billion in cash and short-term investments as of the end of June. "Disney did a good job keeping this quiet," Miller says. Kathleen Kennedy, co-chairman of Lucasfilm, will report to Walt Disney Studios Chairman Alan Horn. Kennedy, who produced Schindler's List and War Horse, will become the new studio president and be executive producer on the new films. Film critic Leonard Maltin, also a historian of the medium, was taken aback by the news and had questions about it. "There's no way of telling where this is going to go at this point," Maltin said.

"Obviously Disney, as they did with Marvel, is investing in a bluechip property that will yield dividends for years to come. "But it's not a fresh property," he added. "But it remains to be seen if they revive the characters. There are a lot of unanswered questions." The latest part of the Star Wars saga, Star Wars Episode VII, is targeted for a 2015 release. (Photo: Lucasfilm) Peter Sealey, a California professor and former president of marketing and distribution for Columbia Pictures, says it appears Lucas gains the most out of the deal. "George Lucas was never a part of Hollywood, he was always an outlier who left for northern California as soon as he had a hit," Sealey said. "So this is an end of an area, the story of a brilliant filmmaker who had one incredibly long home run. This was the only exit strategy he really had. He never wanted to grow the company." Sealey said he can't imagine Disney would let Lucasfilm's entities keep operating away from Disney's home base in the Los Angeles area. "I don't see how or why you keep any of this up in that area, it'll all move down to Burbank," he said.

Disney's theatrical lineup could use a boost in some areas. While the studio's animated Wreck-It Ralph, due Friday, has healthy buzz, other recent releases such as Mars Needs Moms and John Carter have disappointed. "We actually determined that we'd be better off as a company releasing a sequel to Star Wars than probably most other, I'll call them 'not yet determined' films," Iger said. "So we love the fact that this will take its place in our live-action strategy as an already-branded, already-known quantity." 49932 CONNECT TWEET LINKEDIN 425 COMMENTEMAILMORE Read or Share this story: NEVER MISS OUT Managing Your Money Master your money with the latest business and investment news, articles and tips from financial experts each Friday. Disney Buys Lucasfilm for $4 Billion - Business Insider Disney Buys Lucasfilm for $4 Billion Oct. 30, 2012, 4:25 PM 77,596 ">AP Disney announced today it will buy Lucasfilm for $4 billion in cash and stock. George Lucas, the creator of the Star Wars franchise and CEO of Lucasfilm, owns 100% of the company.

Even better: A new Star Wars movie, Episode VII, will debut in 2015. More Star Wars feature films are planned after that. Here's the full press release: BURBANK, Calif. & SAN FRANCISCO--(BUSINESS WIRE)-- Continuing its strategy of delivering exceptional creative content to audiences around the world, The Walt Disney Company (NYSE:DIS) has agreed to acquire Lucasfilm Ltd. in a stock and cash transaction. Lucasfilm is 100% owned by Lucasfilm Chairman and Founder, George Lucas. Under the terms of the agreement and based on the closing price of Disney stock on October 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. The final consideration will be subject to customary post-closing balance sheet adjustments. “Lucasfilm reflects the extraordinary passion, vision, and storytelling of its founder, George Lucas,” said Robert A. 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.” “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 thatStar 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. Ms. 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. Driven by a tremendously talented creative team, Lucasfilm’s legendary Star Wars franchise has flourished for more than 35 years, and offers a virtually limitless universe of characters and stories to drive continued feature film releases and franchise growth over the long term. Star Wars resonates with consumers around the world and creates extensive opportunities for Disney to deliver the content across its diverse portfolio of businesses including movies, television, consumer products, games and theme parks. Star Wars feature films have earned a total of $4.4 billion in global box to date, and continued global demand has made Star Wars one of the world’s top product brands, and Lucasfilm a leading product licensor in the United States in 2011.

The franchise provides a sustainable source of high quality, branded content with global appeal and is well suited for new business models including digital platforms, putting the acquisition in strong alignment with Disney’s strategic priorities for continued long-term growth. 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 ofinnovative 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. Disney Buys Lucasfilm, "Star Wars" Franchise for $4 Billion [UPDATED] It’s not April Fools’ Day.

The Walt Disney Company is acquiring Lucasfilm and the Star Wars franchise for $4.05 billion. The press release: Global leader in high-quality family entertainment agrees to acquire world-renowned Lucasfilm Ltd, including legendary STAR WARS franchise. Acquisition continues Disney’s strategic focus on creating and monetizing the world’s best branded content, innovative technology and global growth to drive long-term shareholder value. Lucasfilm to join company’s global portfolio of world class brands including Disney, ESPN, Pixar, Marvel and ABC. STAR WARS: EPISODE 7 feature film targeted for release in 2015. An investor conference call will take place at approximately 4:30 p.m. EDT / 1:30 p.m. PDT today, October 30, 2012. Details for the call are listed in the release. BURBANK, Calif. & SAN FRANCISCO–(BUSINESS WIRE)— Continuing its strategy of delivering exceptional creative content to audiences around the world, The Walt Disney Company (NYSE: DIS) has agreed to acquire Lucasfilm Ltd. in a stock and cash transaction. Lucasfilm is 100% owned by Lucasfilm Chairman and Founder, George Lucas.

Under the terms of the agreement and based on the closing price of Disney stock on October 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. The final consideration will be subject to customary post-closing balance sheet adjustments. “Lucasfilm reflects the extraordinary passion, vision, and storytelling of its founder, George Lucas,” said Robert A. 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.” “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. Ms. 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. Driven by a tremendously talented creative team, Lucasfilm’s legendary Star Wars franchise has flourished for more than 35 years, and offers a virtually limitless universe of characters and stories to drive continued feature film releases and franchise growth over the long term. Star Wars resonates with consumers around the world and creates extensive opportunities for Disney to deliver the content across its diverse portfolio of businesses including movies, television, consumer products, games and theme parks.

Star Wars feature films have earned a total of $4.4 billion in global box to date, and continued global demand has made Star Wars one of the world’s top product brands, and Lucasfilm a leading product licensor in the United States in 2011. The franchise provides a sustainable source of high quality, branded content with global appeal and is well suited for new business models including digital platforms, putting the acquisition in strong alignment with Disney’s strategic priorities for continued long-term growth. 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. Note: Additional information and comments from Robert A. Iger, chairman and CEO, The Walt Disney Company, and Jay Rasulo, senior executive vice president and CFO, The Walt Disney Company, regarding Disney’s acquisition of Lucasfilm, are attached. Investor Conference Call: An investor conference call will take place at approximately 4:30 p.m. EDT / 1:30 p.m. PDT today, October 30, 2012. To listen to the Webcast, turn your browser to or dial in domestically at (888) 771-4371 or internationally at (847) 585-4405. For both dial-in numbers, the participant pass code is 33674546. The discussion will be available via replay on the Disney Investor Relations website through November 13, 2012 at 5:00 PM EST/2:00 PM PST. ROBERT A.

IGER, CHAIRMAN AND CEO, THE WALT DISNEY COMPANY REMARKS FOR ANALYSTS REGARDING DISNEY’S ACQUISITION OF LUCASFILM LTD., AS PREPARED As we just announced, The Walt Disney Company has agreed to acquire Lucasfilm and its world class portfolio of creative content – including the legendary Star Wars franchise – along with all of its operating businesses, including Industrial Light & Magic and Skywalker Sound. George Lucas is a visionary, an innovator and an epic storyteller – and he’s built a company at the intersection of entertainment and technology to bring some of the world’s most unforgettable characters and stories to screens across the galaxy. He’s entertained, inspired, and defined filmmaking for almost four decades and we’re incredibly honored that he has entrusted the future of that legacy to Disney. Disney has had a great relationship with George that goes back a long way – with Star Wars theme attractions in our parks in Anaheim, Orlando, Paris and Tokyo. This acquisition builds on that foundation and combines two of the strongest family entertainment brands in the world.

It makes sense, not just because of our brand compatibility and previous success together, but because Disney respects and understands – better than just about anyone else – the importance of iconic characters and what it takes to protect and leverage them effectively to drive growth and create value. Lucasfilm fits perfectly with Disney’s strategic priorities. It is a sustainable source of branded, high quality creative content with tremendous global appeal that will benefit all of Disney’s business units and is incredibly well suited for new business models, including digital platforms. Adding the Lucasfilm IP to our existing Disney, Pixar and Marvel IP clearly enhances our ability to serve consumers, strengthening our competitive position — and we are confident we can earn a return on invested capital well in excess of our cost of capital. Star Wars in particular is a strong global brand, and one of the greatest family entertainment franchises of all time, with hundreds of millions of fans around the globe. Its universe of more than 17,000 characters inhabiting several thousand planets spanning 20,000 years offers infinite inspiration and opportunities – and we’re already moving forward with plans to continue the epic Star Wars saga.

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. George handpicked Kathy earlier this year to lead Lucasfilm into the future. She’ll join Disney as President of Lucasfilm, reporting into Walt Disney Studios Chairman Alan Horn and integrating and building the Star Wars franchise across our company. Our successful acquisitions of Pixar and Marvel prove Disney’s unique ability to grow brands and expand high-quality creative content to its fullest franchise potential and maximum value. We’ve leveraged Pixar’s terrific characters and stories into franchises across our company – from feature films to consumer products online games, major attractions in our theme parks, and more.

The 2006 Pixar acquisition delivered more than great Pixar content — it also delivered the means to energize and revitalize the creative engine at Walt Disney Animation – which was crucial to our long term success. Animation is the heart and soul of Disney and our successful creative resurgence will be on full display this weekend when Wreck-It-Ralph opens in theaters across the country. Our acquisition of Marvel three years later combined Marvel’s strong global brand and world-renowned library of characters with Disney’s creative skills, unparalleled global portfolio of entertainment properties, and an integrated business structure that maximizes the value of creative content across multiple platforms and territories. Our first two Marvel films – Thor and Captain America grossed a total of more than $800 million at the box office. This year, Marvel’s The Avengers grossed more than $1.5 billion to become the world’s third highest grossing movie of all time – and an important and lucrative franchise for us. We’re looking forward to a robust slate of new Marvel movies – starting with Iron Man 3 and Thor: The Dark World next year, followed by Captain America: The Winter Soldier in 2014.

And, as we announced previously, Joss Whedon is writing and directing Avengers 2 and developing a Marvel-based series for ABC. Pixar and Marvel both fit our criteria for strategic acquisitions – they add great IP that benefits multiple Disney businesses for years to come, and continue to create value well in excess of their purchase price. The acquisition of Lucasfilm is in keeping with this proven strategy for success and we expect it to create similar opportunity for Disney to drive long-term value for our shareholders. We’re clearly excited about this move forward. We believe we can do great things with these amazing assets….we have a proven track record of maximizing the value of our strategic acquisitions…. and we’re poised to do the same 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 more specifically the Star Wars franchise, fits perfectly within the Disney portfolio of intellectual properties and the strategic and financial implications of this acquisition are compelling.

Our team has spent a tremendous amount of time evaluating this deal and we have concluded we are uniquely positioned to maximize the value of Lucasfilm’s IP in a manner that can generate substantial value for our shareholders above and beyond the purchase price. In this transaction we will acquire rights to the Star Wars and Indiana Jones franchises, a highly talented and expert team, Lucasfilm’s best-in-class post production businesses, Industrial Light and Magic and Skywalker Sound, and a suite of cutting edge entertainment technologies. Our valuation focused almost entirely on the financial potential of the Star Wars franchise, which we expect to provide us with a stream of storytelling opportunities for years to come delivered via all relevant platforms on a global basis. There are a number of ways our company will derive value from Lucasfilm’s intellectual property—some of which can be realized immediately while others will accrue to us over time. George and his team have built Star Wars into one of the most successful and enduring family entertainment franchises in history, as well as one of the best selling licensed character merchandise brands in the U.S. and around the world. However, we believe there is great opportunity to further expand the consumer products business. Today, Star Wars is heavily skewed toward toys and North America.

We see great opportunity domestically to extend the breadth and depth of the Star Wars franchise into other categories. We also plan to leverage Disney’s global consumer products organization to grow the Star Wars consumer products business internationally. Let me note that in 2012 Lucasfilm’s consumer products business is expected to generate total licensing revenue that is comparable to the roughly $215 million in consumer products revenue Marvel generated in 2009, the year in which we announced our acquisition. With renewed film releases, and the support we can give the Star Wars property on our Disney-branded TV channels, we expect that business to grow substantially and profitably for many years to come. We also expect to create significant value in the film business. 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. Lucasfilm has not released a Star Wars film since Revenge of the Sith in 2005.

However, adjusted for inflation, as well as growth in both international box office and 3D, we estimate the three most recent Star Wars films would have averaged about $1.5 billion in global box office in today’s dollars. This speaks to the franchise’s strength, global appeal and the great opportunity we have in the film business. 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. Under the terms of the agreement, Disney will buy Lucasfilm for $4.05 billion, consisting of approximately fifty percent cash and fifty percent in Disney stock. Based on Friday’s closing price of Disney stock, we expect to issue approximately 40 million Disney shares in this transaction. We continue to believe our shares are attractively priced at current levels and therefore, we currently intend to repurchase all of the shares issued within the next two years– and that’s in addition to what we planned to repurchase in the absence of the transaction. Our valuation of Lucasfilm is roughly comparable to the value we placed on Marvel when we announced that acquisition in 2009.

Our Lucasfilm valuation is almost entirely driven by the Star Wars franchise, so any success from other franchises would provide upside to our base case. I realize it may be a challenge for you to quantify our opportunity given the limited amount of publicly available information. But to give you some perspective on the size of the Lucasfilm business– in 2005, the year in which the most recent Star Wars film was released, Lucasfilm generated $550 million in operating income. We’ve taken a conservative approach in our valuation assumptions, including continued erosion of the home entertainment market, and we expect this acquisition to create value for our shareholders. In terms of the impact on our financials, we expect the acquisition to be dilutive to our EPS by low single digit percentage points in fiscal 2013 and 2014 and become accretive to EPS in 2015. Our capital allocation philosophy has been consistent since Bob took over as CEO. In addition to returning capital to shareholders, we have invested, both organically and through acquisitions, in high quality, branded content that can be seamlessly leveraged across our businesses.

Our acquisition of Lucasfilm is entirely consistent with this strategy, and we’re incredibly excited by the prospect of building on Lucasfilm’s successful legacy to create significant value for our shareholders. UPDATE (9:42PM ET): George Lucas and Lucasfilm president Kathleen Kennedy discuss the Disney buyout in this video: UPDATE (10/31 — 4:12AM ET): Disney Chairman/CEO Robert Iger talks about the Lucasfilm acquisition: PARTNER MESSAGE Disney to rename themselves to Buy N large by the year 2025 confirmed. Andrew Great just what we needed a fatter Disney as if Pixar and Marvel weren’t enough. Tim Hodge Hahaa! That is an excellent question Toonio Yikes! Guess George was thinking on teaching their kids about building their on wealths but I think he over did it. Now wonder if Lucas enterprises has such a huge revenue stream to divest the Star Wars franchise and where is the government sitting in all this an the anti-monopoly laws. On the other hand it seems the Star Wars franchise may continue after episode six after all, Meh, seems like Disney scoops up companies after their golden years, kind of like a vortex as they’re the same.

There’s lots of other good stuff brewing out there that doesn’t depend on nostalgia. T.D. “I felt a great disturbance in the Force… as if millions of voices suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened” Richard I guess Disney isn’t such a small world after all. I think it’s strange and cool. SnappingNero Conference call said they plan to release a new star wars movie every two years starting 2015. They will be pumping them out! After the prequels I think it’s great Lucas hands over the reigns to new blood, I just hope Disney dosen’t over do it. Hannah major companies owned or formally owned by Disney: -Pixar Monopoly much? Luke Disney doesn’t own Hearst, they sold Miramax, Soapnet no longer exists, and Hollywood Pictures hasn’t made a new movie since the mid 2000s. Just to Clarify, not to disregard your concerns. Justin Delbert My Aunt’s a Direct TV user; SOAPNet still exists. Disney Junior showed up, but it never replaced SOAPNet on Direct TV. They used to own DiC and Power Rangers, but they sold those back.

They still own a whole lot of Fox Kids shows though. Monopoly? Nah. I always felt whatever they don’t own, Time Warner or Viacom does. eman Disney buying 'Star Wars' maker Lucasfilm for $4.05B | Fox News Disney buying 'Star Wars' maker Lucasfilm for $4.05B Published October 30, 2012 Facebook 0 Twitter 0 Email Print May 25, 2012: Director George Lucas arrives on the red carpet ahead of the screening of the film "Cosmopolis" in competition at the 65th Cannes Film Festival. (Reuters) LOS ANGELES – A decade since George Lucas said "Star Wars" was finished on the big screen, a new trilogy under new ownership is destined for theaters after The Walt Disney Co. announced Tuesday that it was buying Lucasfilm Ltd. from him for $4.05 billion. The seventh movie, with a working title of "Episode 7," is set for release in 2015. Episodes 8 and 9 will follow.

The trilogy will continue 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. Lucas will serve as creative consultant in the new movies. "I'm doing this so that the films will have a longer life," Lucas, the 68-year-old creator of the series and sole owner of Lucasfilm, said in an interview posted on YouTube. "I get to be a fan now ... I sort of look forward to it. It's a lot more fun actually, than actually having to go out into the mud and snow." Disney CEO Bob Iger said Lucasfilm had already developed an extensive story line on the next trilogy, and Episode 7 was now in early-stage development. He said he talked with Lucas about buying the company from him a year and a half ago, but they didn't decide on a deal until very recently as Lucas set in motion his retirement. "The last `Star Wars' movie release was 2005's `Revenge of the Sith' -- and we believe there's substantial pent-up demand," Iger said. More On This...

Twitter abuzz with Disney-Lucas mashups The blockbuster deal announced Tuesday will see Disney pay half the acquisition price in cash and half in newly issued stock. The company expects it to add to earnings in 2015. Along with the cash, Lucas will end up owning about 40 million Disney shares, which is about a 2.2 percent stake of the 1.83 billion shares that will be in circulation when the transaction closes. The deal includes Lucasfilm's prized high-tech production companies, Industrial Light & Magic and Skywalker Sound, as well as rights to the "Indiana Jones" franchise. Lucas was hailed as a cinematic visionary when the original "Star Wars" came out in 1977. But he had become an object of often-vicious ridicule by the time he released 3-D versions of all six films in the Star Wars franchise earlier this year. Die-hard Star War fans had been vilifying Lucas for years, convinced that he had become a commercial sell-out and had compounded his sins by desecrating the heroic tale that he originally sought to tell. They railed against him for adding grating characters such as Jar Jar Binks in the second trilogy and attacked him for tinkering with the original trilogy, too.

Any revision in special edition or home video releases -- such as making the Ewoks blink or having a green-skinned alien named Greedo take the first shot at Han Solo in a famous bar scene -- were treated as blasphemy. The criticism grated on Lucas, who vowed never to make another Star Wars movie. "Why would I make any more when everybody yells at you all the time and says what a terrible person you are?" Lucas told The New York Times earlier this year. "Indiana Jones and the Kingdom of the Crystal Skull," the fourth film in another lucrative franchise, subjected Lucas to even more barbs when it came to the big screen in 2008. Fans of those films were especially outraged about an opening scene that featured Indiana Jones crawling into a lead-lined refrigerator to survive a nuclear bomb blasting. Lucas was fed up by the time he released "Red Tails," a movie depicting the valor of African-American pilots during World War II, earlier this year. He told the Times he was ready to retire from the business of making blockbusters and return to his roots as a student at USC's film school, where he once made a movie about clouds moving in a desert.

Kathleen Kennedy, the current co-chairman of Lucasfilm, will become the division's president and report to Walt Disney Studios Chairman Alan Horn. She will serve as executive producer for the new movies. Directors for the new movies have not yet been announced. In the YouTube video, Lucas said the decision to continue with the saga wasn't inconsistent with past statements. "I always said I wasn't going to do any more and that's true, because I'm not going to do any more, but that doesn't mean I'm unwilling to turn it over to Kathy to do more," Lucas said. He said he has given Kennedy his story lines and other ideas, "and I have complete confidence that she's going to take them and make great movies." Kennedy added that she and Lucas had discussed ideas with a couple of writers about the future movies and said Lucas would continue to have a key advisory role. "My Yoda has to be there," she said. The deal brings Lucasfilm under the Disney banner with other brands including Pixar, Marvel, ESPN and ABC, all companies that Disney has acquired over the years.

A former weatherman who rose through the ranks of ABC, Iger has orchestrated some of the company's biggest acquisitions, including the $7.4 billion purchase of animated movie studio Pixar in 2006 and the $4.2 billion acquisition of comic book giant Marvel in 2009. Coincidentally, Lucas owned the startup that later became Pixar, before he sold it to Apple's Steve Jobs in 1986 for about $5 million. When Jobs sold Pixar to Disney, he became Disney's largest single shareholder with a 7.7 percent stake. Those shares are now held in a trust. Disney shares were not trading with stock markets closed due to the impact of Superstorm Sandy in New York. They closed on Friday at $50.08. Advertisement How Disney Bought Lucasfilm—and Its Plans for 'Star Wars' - Bloomberg Bloomberg the Company & Its Products Bloomberg Anywhere Remote LoginBloomberg Anywhere Login Bloomberg Terminal Demo Request Bloomberg Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Customer Support Advertising Bloomberg Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. Customer Support How Disney Bought Lucasfilm—and Its Plans for 'Star Wars' The inside story of how Disney bought Lucasfilm—and its plans for Star Wars by More stories by Devin Leonard From left, R2-D2, Disney Chairman and CEO Robert Iger, Lucasfilm President Kathleen Kennedy, and Mickey Mouse Photograph by Jeff Minton for Bloomberg Businessweek One weekend last October, Robert Iger, chief executive officer of Walt Disney, sat through all six Star Wars films. He’d seen them before, of course. This time, he took notes. Disney was in secret negotiations to acquire Lucasfilm, the company founded by Star Wars creator George Lucas, and Iger needed to do some due diligence. The movies reacquainted Iger with Luke Skywalker, the questing Jedi Knight, and his nemesis Darth Vader, the Sith Lord who turns out to be (three-decade-old spoiler alert) his father. Beyond the movies, Iger needed to know Lucasfilm had a stockpile of similarly rich material—aka intellectual property—for more Star Wars installments.

As any serious aficionado knows, there were always supposed to be nine. But how would Disney assess the value of an imaginary galaxy? What, for example, was its population? As it turned out, Lucas had already done the cataloging. His company maintained a database called the Holocron, named after a crystal cube powered by the Force. The real-world Holocron lists 17,000 characters in the Star Wars universe inhabiting several thousand planets over a span of more than 20,000 years. It was quite a bit for Disney to process. So Lucas also provided the company with a guide, Pablo Hidalgo. A founding member of the Star Wars Fan Boy Association, Hidalgo is now a “brand communication manager” at Lucasfilm. “The Holocron can be a little overwhelming,” says Hidalgo, who obsesses over canonical matters such as the correct spelling of Wookiee and the definitive list of individuals who met with Yoda while he was hiding in the swamps of Dagobah.

The clandestine talks eventually led to the announcement last October that Disney would pay $4 billion for Lucasfilm, thus putting the Star Wars heroes and villains into the same trove of iconic characters as Iron Man, Buzz Lightyear, and Mickey Mouse. Disney sent excitable Star Wars fans into a frenzy by unveiling a plan to release the long-promised final trilogy starting in 2015. Their enthusiasm reached a crescendo in January when J.J. Abrams, director of the acclaimed 2009 rebooting of Star Trek, signed on to oversee the first film. “It’s like a dream come true,” gushes Jason Swank, co-host of RebelForce Radio, a weekly podcast. The deal fit perfectly into Iger’s plan for Disney. He wants to secure the company’s creative and competitive future at a time when consumers are inundated with choices, thanks to a proliferation of cable television networks and the ubiquity of the Internet. “It’s a less forgiving world than it’s ever been,” he says.

“Things have to be really great to do well.” Part of Iger’s strategy is to acquire companies that could be described as mini-Disneys such as Pixar and Marvel—reservoirs of franchise-worthy characters that can drive all of Disney’s businesses, from movies and television shows to theme parks, toys, and beyond. Lucas’s needs were more emotional. At 68, he was ready to retire and escape from the imaginary world he created—but he didn’t want anybody to desecrate it. “I’ve never been that much of a money guy,” Lucas says. “I’m more of a film guy, and most of the money I’ve made is in defense of trying to keep creative control of my movies.” Lucas is speaking by phone, giving a reluctant interview about the sale of Lucasfilm. He tells the familiar story about how he didn’t set out to be rich and powerful. He just wanted to make experimental movies like THX-1138, set in a futuristic world where sex is illegal, drug taking is mandatory, and brutal androids make sure people comply with the rules. Lucas had a searing experience with THX-1138. Warner Bros.

took the movie out of his hands and recut it before it was released in 1971. Universal did the same thing with his next film, American Graffiti, set in his hometown of Modesto, Calif. But unlike THX-1138, American Graffiti was a hit. Lucas, still smarting from the way the studios treated his previous movies, decided to take a different approach with his next project, Star Wars Episode IV: A New Hope. He turned down a $500,000 fee to direct his own script, instead asking for $50,000 and the rights to all sequels. Episode IV, which opened in 1977, and the following two movies have grossed a combined $1.8 billion, including rereleases. After that first trilogy, Lucas was wealthy enough to do whatever he pleased. He could produce director Paul Schrader’s Mishima: A Life in Four Chapters, a brooding art film with a Philip Glass score that made only $500,000 at the box office.

Or he could produce a television series about the early years of Indiana Jones, the swashbuckling archaeologist he created with Steven Spielberg. Unlike Raiders of the Lost Ark, The Young Indiana Jones Chronicles were intended to be history lessons. In one episode, Young Indiana would befriend Sidney Bechet, the seminal New Orleans saxophonist, and learn to play jazz. In the early 1990s, Lucas pitched the show to Iger, who’d risen from TV weatherman in upstate New York to chairman of ABC. They met at Skywalker Ranch, Lucas’s 6,100-acre property in Marin County, Calif. Iger had misgivings, but Indiana Jones was one of the most popular movie characters of all time. “I wanted it to work very badly,” Iger says. “It was George Lucas, come on.” Iger green-lighted the series and kept it on ABC for two seasons even as it failed to find an audience and solidify creatively. “It struggled,” Lucas says of Chronicles. “But he was very supportive of the whole thing.” Photograph by Jeff Minton for Bloomberg Businessweek Lucas released Star Wars Episode I: The Phantom Menace in 1999.

Combined, the three films in the second trilogy would gross $2.5 billion, but many fans thought they were a mess. They were particularly appalled by the bumbling Jar Jar Binks from the planet Naboo, a creature with an inexplicable Jamaican accent who became the butt of jokes on South Park and The Simpsons. The criticism got to Lucas. He found it difficult to be creative when people were calling him a jerk. “It was fine before the Internet,” he says. “But now with the Internet, it’s gotten very vicious and very personal. You just say, ‘Why do I need to do this?’ ” At the same time, Lucas was reluctant to entrust his universe to anyone else. “I think he felt like he was a prisoner of Star Wars, and that only intensified over the years,” says Dale Pollock, author of Skywalking: The Life and Films of George Lucas. Meanwhile, Iger continued to rise at ABC. After Disney bought the network in 1996, Iger became Disney Chairman Michael Eisner’s heir apparent. For nearly a decade, Iger remained in the shadow of his overbearing mentor. But, by 2005, Disney was in trouble.

Its once-powerful animation department hadn’t had a hit in years, and the combative Eisner had alienated many shareholders. Disney’s board asked Iger to take over. He was widely underestimated at the time—including by this magazine, which described him as a “bland, scripted CEO” whom no one would call “a big strategic thinker.” Iger, however, proved to have a very clear vision. He understood that Disney’s success rested on developing enduring characters. This was a strategy Walt Disney pioneered with Mickey Mouse and Grimm’s Fairy Tales heroines Snow White and Cinderella. More recently, Disney translated The Lion King, a hit animated movie, into a long-running Broadway show. Pirates of the Caribbean, a theme park ride, became a movie series and drove sales of related books and video games. Can Disney do for Lucasfilm's 'Star Wars’ what it did for Pixar's 'Toy Story’? Iger accelerated that process by making acquisitions. The first was the $7.4 billion purchase of Pixar Animation Studios in 2006. Iger personally negotiated the deal with Steve Jobs, who was then Pixar’s CEO.

As part of the deal, Iger kept the creative team, led by John Lasseter, in place and allowed them to continue to operate with a minimum of interference in their headquarters near San Francisco. “Steve and I spent more time negotiating the social issues than we did the economic issues,” Iger says. “He thought maintaining the culture of Pixar was a major ingredient of their creative success. He was right.” The transaction gave Disney a new source of hit movies. Jobs also became a Disney board member and its largest shareholder. Periodically he would call Iger to say, “Hey, Bob, I saw the movie you just released last night, and it sucked,” Iger recalls. Nevertheless, the Disney CEO says that having Jobs as a friend and adviser was “additive rather than the other way around.” In 2009, Iger negotiated a similar deal for Disney to buy Marvel Entertainment for $4 billion. Once again, Iger kept the leadership intact: Marvel CEO Isaac Perlmutter and Marvel studio chief Kevin Feige. He thought Disney would profit from their deep knowledge of the superhero movie genre. While the Marvel acquisition didn’t involve a celebrity like Jobs or Lucas, it’s paid off handsomely.

Last year, Disney released The Avengers, the first Marvel film it distributed and marketed. The movie grossed $1.5 billion globally, making it the third-most lucrative movie in history. “It was successful beyond belief,” says Jessica Reif Cohen, a media analyst at Bank of America Merrill Lynch. Disney may have a light touch with the moviemaking at Pixar and Marvel, but it happily uses their characters and worlds to bolster its other businesses. In June it opened Carsland, a ride based on the popular Pixar films, which rejuvenated the once-moribund Disney California Adventure Park in Anaheim. Iger is now considering Marvel theme park attractions in California and overseas. ABC is also developing S.H.I.E.L.D., a prime-time television show about the counterintelligence agency in The Avengers. Not everything Disney’s done recently has worked. Last year’s John Carter was a box office catastrophe, and there will inevitably be more flops to come. It’s still the movie business. But Disney’s array of character-driven franchises, combined with its non-movie profit centers such as ESPN, have made it into something unusual in the blockbuster/flop economy of Hollywood: a diversified company producing reliable growth.

In the last three years the company’s revenue and operating income have risen steadily, and the stock has doubled since Iger was named CEO in March 2005. What’s more, the success of the Pixar and Marvel acquisitions made it possible for Iger to hunt for more mini-Disneys. Lucasfilm was at the top of his list. In May 2011, Iger flew to Walt Disney World Resort in Florida for the opening of Star Tours: The Adventures Continue, an upgraded Star Wars ride offering patrons the illusion of traveling through space to visit planets like Tatooine. Lucas was deeply involved in the attraction, personally reviewing its progress every two weeks for several years. On the morning of the Star Tours opening, Iger met Lucas for breakfast at the Hollywood Brown Derby, one of Disney World’s restaurants. It was closed for the occasion so the two men could speak freely. Fresh from his daily workout, Iger ordered a yogurt parfait. Lucas treated himself to one of the Brown Derby’s larger omelets. The two exchanged pleasantries. Then Iger inquired whether Lucas would ever consider selling his company.

Lucas replied that he’d recently celebrated his 67th birthday and was starting to think seriously about retiring. So perhaps the sale of his company was inevitable. “I’m not ready to pursue that now,” he told Iger. “But when I am, I’d love to talk.” Iger did his best to conceal his excitement and told him to “call me when you’re ready.” Then it was time for the two to arm themselves for a mock light saber battle to open the attraction. They joined an actor in a Darth Vader costume on a stage before several hundred cheering Star Wars fans. Iger was impressed by Lucas’s skills. “He just has this way of carrying that light saber,” Iger recalls. “He was more adept at using it than me.” Lucas had paid close attention to how Disney had handled Pixar, which he still refers to as “my company.” He founded it as the Lucasfilm Computer Division in 1979, and sold it to Jobs six years later. He calls Disney’s decision not to meddle with Pixar “brilliant.” If he sold Lucasfilm to Disney, he figured there might still be a way to retain some influence over his fictitious universe. Much would depend on who ran Lucasfilm after he retired.

He invited Kathleen Kennedy to lunch in New York. She was one of the founders of Amblin Entertainment, which produced a long line of hits including Steven Spielberg’s Jurassic Park and Schindler’s List, and had been Lucas’s close friend for more than two decades. “I suppose you’ve heard that I’m moving forward fairly aggressively to retire,” Lucas told her. “Actually, no,” she said. Lucas asked if she was interested in taking over Lucasfilm. Kennedy may have been blindsided by the news, but she happily accepted the position. “When Kathy came on, we started talking about starting up the whole franchise again,” he says. “I was pulling away, and I said, ‘Well, I’ve got to build this company up so it functions without me, and we need to do something to make it attractive.’ So I said, ‘Well, let’s just do these movies.’ ” Lucas and Kennedy hired screenwriter Michael Arndt, who won an Oscar for Little Miss Sunshine, to begin work on the script for Episode VII. They enlisted Lawrence Kasdan, who wrote the screenplays for The Empire Strikes Back and Return of the Jedi, to act as a consultant.

Lucas started talking to members of the original Star Wars cast, such as Mark Hamill, Carrie Fisher, and Harrison Ford, about appearing in the films. In June 2012, he called Iger. In the five months of negotiations that followed, Lucas argued that the best people to make the next Star Wars trilogy would be his longtime Lucasfilm executives. “I had a group of very, very talented people that had worked for the company for many, many years and really knew how to market Star Wars, how to do the licensing and make the movies,” Lucas explains. “I said, ‘I think it would be wise to keep some of this intact. We need a few people to oversee the property, you know, who are just dedicated to doing that, so we’re sure we get this right.’” From left, Lucasfilm President Kathleen Kennedy, R2-D2, Disney Chairman and CEO Robert Iger, and Mickey Mouse Photograph by Jeff Minton for Bloomberg Businessweek Iger understood Lucas’s concerns. “George said to me once that when he dies, it’s going to say ‘Star Wars creator George Lucas,’ ” he says.

Still, Iger wanted to make sure that Lucas, who was used to controlling every aspect of Star Wars, from set design to lunchboxes, understood that Disney, not Lucasfilm, would have final say over any future movies. “We needed to have an understanding that if we acquire the company, despite tons of collegial conversations and collaboration, at the end of the day, we have to be the ones who sign off on whatever the plans are,” says Alan Horn, chairman of Walt Disney Studios. Lucas agreed, in theory. The reality of giving up control weighed on him, though. At the end of every week before she flew home to Los Angeles, Kennedy says, she asked Lucas how he was feeling. Sometimes he seemed at peace. Other times, not. “I’m sure he paused periodically to question whether he was really ready to walk away,” she says. At first Lucas wouldn’t even turn over his rough sketches of the next three Star Wars films. When Disney executives asked to see them, he assured them they would be great and said they should just trust him. “Ultimately you have to say, ‘Look, I know what I’m doing.

Buying my stories is part of what the deal is.’ I’ve worked at this for 40 years, and I’ve been pretty successful,” Lucas says. “I mean, I could have said, ‘Fine, well, I’ll just sell the company to somebody else.’ ” Once Lucas got assurances from Disney in writing about the broad outlines of the deal, he agreed to turn over the treatments—but insisted they could only be read by Iger, Horn, and Kevin Mayer, Disney’s executive vice president for corporate strategy. “We promised,” says Iger. “We had to sign an agreement.” When Iger finally got a look at the treatments, he was elated. “We thought from a storytelling perspective they had a lot of potential,” he says. At the end of October, Iger arranged for Lucas to fly down to Disney’s Burbank headquarters and sign the papers. He thought Lucas seemed melancholy. “When he put that pen to the piece of paper, I didn’t detect a hesitation,” Iger says. “But I did detect there was a lot of emotion. He was saying goodbye.” Iger, on the other hand, was giddy. The day after the deal closed he went trick-or-treating with his family.

“I was Darth Vader,” he says. “I felt a disturbance in the Force, as if millions of geeks were shocked in an instant,” tweeted one ecstatic fan boy the day the news broke. It was a common refrain. The fans, too, had watched what happened when Disney bought Pixar and Marvel and many felt that the company could be trusted with R2-D2 and Princess Leia. “Their handling of the Marvel properties has given them a lot of geek cred,” says Swank, the RebelForce Radio co-host. Iger’s willingness to let Lucasfilm remain intact with Kennedy at the helm paid off almost immediately. Before the deal closed in late December, she reached out to J.J. Abrams’s agent to see if he would direct Episode VII. “He was very quick to say, ‘No, I don’t think I want to step into that,’ ” she says. “He was immersed in finishing [Star Trek Into Darkness, the sequel to his first Star Trek movie]. He felt that he might be exploring territories that were too similar.” Kennedy persisted. She visited Abrams at the Santa Monica headquarters of Bad Robot, his production company, with Arndt and Kasdan.

“By the time we finished, which was a couple of hours later, he had really gone 180 degrees,” she says. “To be involved in this next iteration of the Star Wars series is more exciting than I can talk about,” says Abrams. Lucas announced in January that he was engaged to Mellody Hobson, a Chicago money manager, and he has been spending much of his time in her hometown. Even so, he’s attended story meetings for the new film, adjudicating the physical laws and attributes of the Star Wars universe. “I mostly say, ‘You can’t do this. You can do that,’ ” Lucas says. “You know, ‘The cars don’t have wheels. They fly with antigravity.’ There’s a million little pieces. Or I can say, ‘He doesn’t have the power to do that, or he has to do this.’ I know all that stuff.” Asked whether members of the original Star Wars cast will appear in Episode VII and if he called them before the deal closed to keep them informed, Lucas says, “We had already signed Mark and Carrie and Harrison—or we were pretty much in final stages of negotiation.

So I called them to say, ‘Look, this is what’s going on.’ ” He pauses. “Maybe I’m not supposed to say that. I think they want to announce that with some big whoop-de-do, but we were negotiating with them.” Then he adds: “I won’t say whether the negotiations were successful or not.” The most important business stories of the day. Get Bloomberg's daily newsletter. The school, work and life hacks you need to get ahead. You will now receive the Game Plan newsletter Iger is busy readying the machinery that will crank out Star Wars-related toys and theme park attractions and whatever Disney deems as appropriate franchise exploitation. He says he’s looking to expand sales of Star Wars merchandise overseas and that ABC and Lucasfilm are discussing a live-action TV series. At the same time, Iger says he doesn’t want to do anything that might detract from the upcoming movies. “I don’t want to overcommercialize or overhype this,” he says. “It’s my job to prevent that.” The Lucasfilm acquisition could turn out to be Iger’s last big move at Disney. He plans to step down as CEO in 2015, although he’ll remain chairman for another year.

Merrill Lynch’s Cohen doesn’t expect Disney to do any large deals between now and then. “I think it’s going to be a period of reaping the benefits of the deals Bob has already done,” she says. Iger seems to be doing just that. There’s a table in his office decorated with Disney artifacts, including two light sabers. “People have been sending me lots of these,” he chuckles. He picks one up and waves it at an imaginary foe. “I’m getting better at this.” Before it's here, it's on the Bloomberg Terminal. The Walt Disney Company Acquires Lucasfilm; Star Wars: Episode VII Set for 2015 - IGN IGN The Walt Disney Company Acquires Lucasfilm; Star Wars: Episode VII Set for 2015 Share The Walt Disney Company Acquires Lucasfilm; Star Wars: Episode VII Set for 2015 Share. By Jim Vejvoda UPDATE: Disney announces in an investor conference call after today's announcement that they intend to make more than one new Star Wars movie, beginning with Episode VII in 2015 followed by Episodes VIII and IX "every other year" and then "we'll go from there." Holy crap, fanboys!

Not only did the news break today that the Walt Disney Company has acquired Lucasfilm Ltd. for $4.05 billion, but the studio press release also announces that a Star Wars: Episode VII feature film is targeted for a 2015 release! Yes, 2015 will give us The Avengers 2, Justice League of America and now a new Star Wars movie! This deal means Disney also now owns the Indiana Jones franchise as well as effects firm Industrial Light & Magic and Skywalker Sound. IGN NEWS The original press release follows: Continuing its strategy of delivering exceptional creative content to audiences around the world, The Walt Disney Company (NYSE: DIS) has agreed to acquire Lucasfilm Ltd. in a stock and cash transaction. Lucasfilm is 100% owned by Lucasfilm Chairman and Founder, George Lucas. Under the terms of the agreement and based on the closing price of Disney stock on October 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. The final consideration will be subject to customary post-closing balance sheet adjustments.

“Lucasfilm reflects the extraordinary passion, vision, and storytelling of its founder, George Lucas,” said Robert A. 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.” “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. Ms. 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. Driven by a tremendously talented creative team, Lucasfilm’s legendary Star Wars franchise has flourished for more than 35 years, and offers a virtually limitless universe of characters and stories to drive continued feature film releases and franchise growth over the long term. Star Wars resonates with consumers around the world and creates extensive opportunities for Disney to deliver the content across its diverse portfolio of businesses including movies, television, consumer products, games and theme parks. Star Wars feature films have earned a total of $4.4 billion in global box to date, and continued global demand has made Star Wars one of the world’s top product brands, and Lucasfilm a leading product licensor in the United States in 2011.

The franchise provides a sustainable source of high quality, branded content with global appeal and is well suited for new business models including digital platforms, putting the acquisition in strong alignment with Disney’s strategic priorities for continued long-term growth. 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. IN THIS ARTICLE

Question: What company acquired the rights to the "Star Wars" franchise in 2012?
Answer: Walt Disney