DISNEY TO ACQUIRE LUCASFILM

For video of George Lucas and Kathleen Kennedy talking about the future of Star Wars movies, CLICK HERE.

For video of Lucas and Disney's Robert Iger talking about the deal, CLICK HERE.

There will be a Star Wars Episode 7 -- from Walt Disney Pictures.

The Walt Disney Company has announced it has agreed to acquire Lucasfilm Ltd. from Chariman and Founder George Lucas in a stock-and-cash transaction.

Under the terms of the agreement and based on the closing price of Disney stock on Oct. 26, 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 Lucasfilm acquisition follows Disney's acquisitions of Pixar and Marvel.

Kathleen Kennedy, current Co-Chairman of Lucasfilm, will become President of Lucasfilm, reporting to Walt Disney Studios Chairman Alan Horn, will serve as the brand manager for Star Wars. Kennedy will serve as executive producer on new Star Wars feature films, with 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.

"For the past 35 years, one of my greatest pleasures has been to see Star Wars passed from one generation to the next," Lucas said. "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."

"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."

Under the deal, Disney will acquire ownership of Lucasfilm, including its 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 Lucasfilm's portfolio of cutting-edge entertainment technologies. Lucasfilm, headquartered in San Francisco, operates under the names Lucasfilm Ltd., LucasArts, Industrial Light & Magic, and Skywalker Sound, and, according to Disney, the present intent is for Lucasfilm employees to remain in their current locations.