Event: Global entertainment giant Walt Disney (DIS) just got a whole lot bigger with its announcement to buy Lucas Films. The $4 billion deal brings the lucrative and popular Star Wars brand to the king of fantasy. Disney is now the ruler of the entertainment universe in a major way. Shares of Disney are up more than 2% in premarket trading on Wednesday — the first day of trading after the news was released on Tuesday.
Analysis: Disney is paying a huge price for a property with limited product. Of course that product is universally known as one of the best science fiction stories of all time. That makes this move a huge plus for Disney. Management deserves kudos for making this deal happen. Of course not many could pay the stiff price that it would take to acquire Lucas Films, but that is a bit beside the point. Lucas Film could certainly stay independent if it so chose. The point is that Disney is acquiring a behemoth here that is only going to get bigger. With the potential for more films, live and animated Disney is a perfect home for the franchise. It will make a fortune on this deal. It does not get any better than this for an acquiring company. Lucas Film and Disney are a perfect marriage. I’d own Disney stock just on this deal alone.
Action: For long-term investors, the acquisition of Lucas Film will be highly accretive to shareholders. Acquiring shares now even after the initial pop is an excellent long-term investment opportunity.
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