Isaac Hill Nicholas Biancuzzo Adam Luehmann Jocelyn Bykowski COMPANY ACQUISITIONS

ACQUISITION LAW Several Federal regulations limiting mergers to prevent a monopoly Sherman Anti-Trust Act of 1890 Clayton Anti-Trust Act of 1914 Hart-Scott-Rodino Antitrust Improvements Act of 1976 Procedure to accomplish a corporate merger are established by individual States Procedures can vary from State to State but in general are fairly similar

ACQUISITION LAW California Law Title 1, Division 1, Chapter 11 Board of each corporation must approve the merge Agreement must state: Terms and Conditions of merger Amendments Name and place of each corporation and which is the surviving corporation Manner of converting shares of the corporations into shares of the surviving corporation Other details or provisions as desired ex: cash in lieu of fractional shares

LAW, CONT. Agreement must be signed by Chairman of board President Vice President and Secretary Vice President and Assistant Secretary Surviving company assumes the liabilities of disappearing companies Many of the regulations differ if you are merging with a foreign corporation If transferring property a copy must of the agreement must be filled at county where the property located Votes needed to approve a merger vary depending on what type of corporation is disappearing and what type is surviving

FOR REFERENCE In total California Corporate Code has 18 different areas where mergers are discussed. Title 1 Division 1.5 Chapter 8, Title 1 Division 2 Part 2 Chapter 10 and both articles under Chapter 10, Division 2 Part 3 Chapter 10 and its articles, Division 2 Part 4 Chapter 6 Article 4, Division 3 Part 2 Chapter 10 Article 1&2. Title 2 Chapter 5 Article 9, Title 2 Chapter 5.5 Article 11, Title 2.5 Chapter 12, Title 2.6 Article 10. Title 3 Part 1 Chapter 6 Article 5. Title 4 Division 3 Chapter 9.

PRE-WORK Conduct a Merger & Acquisition Audit Examination of internal capabilities for integrating information systems, operations, sales, and corporate cultures Helps identify weakness and gaps to fill before a merger conduct comprehensive financial due diligence From Merger and Acquisition Readiness an article from Crowe Horwath LLP, a public accounting and consulting firm pdf/PERF11902_MAIntegrationReadinessWP_lo.pdf pdf/PERF11902_MAIntegrationReadinessWP_lo.pdf

WHAT IGER DID Bob Iger is President and Chief Operating Officer of Disney Talked to Lucas about his willingness to sell Looked into intellectual property about planning and thought for Star Wars (what had already been thought up. eg: characters, planets, stories) Highly likely he examined financial statements and assets of Lucasfilms and its subsidiaries though no source expressly stated this

MERGER AGREEMENT George Lucas sole owner of Lucas Films Consideration ($4.05 billion) Half in cash Half in stock.

STOCK CONSIDERATION Stock Amounts About 37,000,000 $53.77 a share

MERGER CUSTOMARY CONDITIONS Obtaining clearance Sherman Antitrust Act Clayton Antitrust Act Hart-Scott-Rodino Antitrust Improvements Act certain non-United States merger control regulations

COVENANTS Covenants of Lucasfilm (W-8) To conduct its business in the ordinary course Covenants of both Disney and Lucasfilm (W-8) Cooperation on seeking regulatory approvals Access to each other’s information

COVENANTS Lucasfilm has also agreed not to (i) Propose other combination transactions (ii) Enter into discussions for alternative business combination transactions. The Merger Agreement contains termination rights for both parties If the parties consent to termination If the transaction has not closed within six months If the transaction is prohibited If the other party breaches certain agreements

WHAT DISNEY ACQUIRES Intangibles Employee Experience Greater Consumer base Tangibles Consumer Products Visual Effects Audio Post-Production bought-lucasfilm-and-its-plans-for-star-wars

EMPLOYEE EXPERIENCE Estimated over 500 employees. Valuable work experience New Ideas George Lucas – Creative Consultant Lucasfilm’s Employees

GREATER CONSUMER BASE Tapping into a huge consumer base Greater share of the market (Star Wars Series) Over $4.2 billion box office gross Over $3.7 billion in DVD sales

CONSUMER PRODUCTS Lucas Licensing Clothes Toys Video Games Movies Books

VISUAL EFFECTS Industrial Lights & Magic Has created visual effects for over 300 feature films Computer generated characters in Transformers, and Jurassic Park Well versed in Blue-screen photography “Today, ILM features the largest and most advanced digital effects pipeline in the entertainment industry”- Lucasfilm Ltd. ILM Video

AUDIO POST PRODUCTION Skywalker Sound Helps clients in fulfilling their post-production needs. Feature Films, Commercials, video games, television Has 6 mixing studios 18 academy awards

PREVIOUS DISNEY ACQUISITIONS

PREVIOUS ACQUISITIONS Disney drawn to ABC for highly creative culture committed to developing and distributing original and innovative programs Will help Disney globally to combine with ABC networking Pixar was a rival If Pixar would merge with a rival, it could be devastating

WHY MERGE? Deploys capital towards enhancing the portfolio of its globally recognized brands in order to drive long-term growth. Strong, recognizable global brand Maximize the value One of the best selling licensed character merchandise brands in the U.S. and around the world - See more at: releases/2012/10/disney-acquire-lucasfilm-ltd#sthash.r9SpRXtO.dpuf releases/2012/10/disney-acquire-lucasfilm-ltd#sthash.r9SpRXtO.dpuf In 2012, Lucasfilm's consumer products business was expected to generate total licensing revenue that is comparable to the roughly $215 million in consumer products revenue Marvel generated in See more at: releases/2012/10/disney-acquire-lucasfilm-ltd#sthash.r9SpRXtO.dpufhttp://thewaltdisneycompany.com/disney-news/press- releases/2012/10/disney-acquire-lucasfilm-ltd#sthash.r9SpRXtO.dpuf

CONCLUSION Acquisitions help companies expand and diversify (in the case of Disney) Disney demonstrates a positive acquisition with Lucasfilms, among their other acquired companies Disney is now on the road to success with the release of the new Star Wars Episode in 2015 Mergers are everywhere, we must understand how to use them

APPENDIX billion-deal-build-giant-for.html?pagewanted=all&src=pm billion-deal-build-giant-for.html?pagewanted=all&src=pm