Amid a difficult operating environment,
The Walt Disney Company
) continues to deploy its capital toward its core strategies,
which include enhancing the portfolio of its globally recognized
brands, to drive long-term growth. One such move is the company's
recent agreement to acquire Lucasfilm Ltd.
Disney agreed to acquire George Lucas' Lucasfilm Ltd. for a
cash and stock deal worth $4.05 billion. Disney stated that it
will pay half of the amount in cash and will issue 40 million
shares on closure.
Walt Disney is one of the world's largest diversified
entertainment companies and commands a formidable portfolio of
globally recognized brands, primarily its namesake brand - Walt
Disney, followed by ABC, ESPN, Pixar and Marvel Entertainment.
These renowned brands offer a strong competitive edge to the
company and bolster its well-established position in the market
against major players like
Time Warner Inc
As per the agreement, Disney will get hold of Lucasfilm,
including its renowned 'Star Wars' and Indiana Jones franchises.
Further, Disney will also acquire the operating businesses of the
company, including live-action film production, animation, visual
effects, consumer products and audio post production. Moreover,
Kathleen Kennedy, the current Co-Chairman of Lucasfilm, will be
the President of Lucasfilm.
We believe the acquisition will not only fortify Disney's
position but will also expand its world-class portfolio of
content while creating long-term opportunities by driving revenue
growth through its multiple platforms, which include theme parks,
consumer products, media networks and studio entertainment.
We maintain a long-term Neutral recommendation on the stock.
Moreover, Disney currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating.
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