Disney & Lucas Film

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Table of Contents

Executive Summary| i|
Introduction | 1|
Marvel Industry Analysis| 1|
Disney Industry Analysis| 3|
Marvel Company Analysis| 4|
SWOT Analysis| 6|
Valuation| 6|
Disney Company Analysis | 7|
Share Price Analysis| 10|
Examination of the Premium| 12|
Takeover Overview, Methods and Tactics| 14|
Analyst, Media and Legal Reaction| 16|
Recommendation and Conclusion| 17|
References| 19|
Appendices| 22|

, increased pressure from eBook innovation and internet piracy. As such, this industry grew an estimated 2.50% from 2008 to 2009 and maintained a Compounded Annual Growth Rate (CAGR) of 5.14% from 2000-2009 (Jackson, 2011).

Licensing

Marvel’s second major unit of operation consist of its large licensing business. Marvel licenses the use of its various characters to gaming, movie, toy and television show producers alike. This market is primarily driven by trademark and character licensing. As of 2007, Intellectual Property (IP) licensing represented a $USD 30 Billion market in the United States (U.S.) alone (IBISWorld Licensing, 2012). IP licensing exhibited constant growth. However, in 2008 it incurred a slight contraction of 3.4% due to the global financial crisis. As well, from 2000-2008 it had a CAGR of 5.09%. Further, character and trademark licensing represented more than 40.0% of the total licensing market for 2012. The IP Licensing market is considered to be moderately aggregated with Disney acting as the industry leader (after its acquisition of Marvel) with just over 10.50% of market share (IBISWorld Licensing, 2012). However, the industry did exhibit lacklustre performance in 2009, (down almost 10.00%) from its 2007 high. Film Production

Marvel’s final major operational segment consists of its film production operations. Generally, the industry has consistently outperformed the market (CAGR 5.80% from 2000-2009) and as of 2009 represented a $USD 118 Billion dollar market in the U.S. (Thomson ONE, 2012). The industry is highly consolidated with the top 10 studios (Disney being in second place), representing over 70.00% of the market. (Nash, 2012). The changing nature of consumer entertainment consumption is gradually eroding various industry segments such as DVD sales and DVD rentals. However, this has been compensated for by the adoption of other viewing alternatives like: pay per view and direct broadcast television (Thomson ONE, 2012).

Moreover, have managed to impose price increases on consumers. Thus, allowing them to earn $USD 2.5 Billion more in 2009 than in 2001 despite lower ticket sale volume for the same comparable period. (Nash, 2012). The film industry has also proven to be resistant to the economic downturns with moderate growth during the recessionary slumps of: 2001, 2008 and 2009 (Thomson ONE, 2012).

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Disney Industry Analysis

Disney operates in two major segments: licensing and entertainment. These segments are similar to the ones Marvel operates in. However, Disney also incorporates theme parks into its operations, thus differing from Marvel (Disney Financial Report, 2008). It should also be noted that Disney media services go well beyond simply producing children’s shows and films. They own several studios and until 2009 owned ABC (Thomson ONE, 2012). It can be stated that, the two corporations with regards to their fictional character businesses, target distinct customer bases with respect to gender, but target similar customer bases with respect to age. Disney primarily targets young children and teenage girls, whereas Marvel targets young adult males and teenage boys.

Theme Parks

Disney is the leader in the theme-park market; with all of the top 5 theme parks in the world belonging to this company. In 2009, although most theme parks experienced significant decreases in customer presence, Disney managed to actually increase attendance through...
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