A new toy licensing agreement for products based on three upcoming ``Star Wars'' films will add significant force to Hasbro Inc. and Galoob Toys Inc. in the competitive toy business.
No less significant is the equity position in both companies that accrues to Lucasfilm Ltd., the film and entertainment business owned by George Lucas, creator of the popular movies.
Lucasfilm is in Marin County, Calif., just north of San Francisco.
Hasbro spokesman Wayne Charness declined in an Oct. 16 telephone interview to provide financial details, but did say the agreement underscores the firm's intent to expand its presence in the toy market. The Pawtucket, R.I., company, with annual sales of $3 billion, is the No. 2 toy manufacturer in the United States, after Mattel Inc. of El Segundo, Calif.
Charness said the first of the new ``Star Wars'' films under development is scheduled for release sometime in 1999.
``It's a major triumph for Hasbro,'' he said, adding that the firm is pleased to have Lucas as an investor.
Hasbro, which has existing licenses for the production of ``Star Wars'' toys, such as plastic action figures, granted Lucasfilm warrants at an undisclosed price for about 5 percent of Hasbro's stock. The stock was selling Oct. 16 for about $28 per share. In March, Hasbro reported to the Securities and Exchange Commission that it had about 130 million shares of common stock outstanding.
Hasbro markets toys manufactured by suppliers primarily in the Far East and Mexico, though it does operate a number of its own production facilities in Rhode Island, Massachusetts, South Carolina, Texas, Vermont and Canada. The firm employs 13,000 worldwide and 6,500 in the United States.
Galoob Toys, based in South San Francisco, Calif., said only that it has granted Lucasfilm warrants for slightly less than 20 percent of Galoob's outstanding common stock, equal to about 3.6 million shares at an exercise price of $15 per share. The company's stock was selling Oct. 16 for about $17 per share.
Galoob, with annual sales of $285 million, employs 224. In 1995, the firm formed alliances with Turner Home Entertainment and 20th Century Fox for the manufacture and marketing of entertainment-related toy products.
Galoob uses 21 manufacturers, primarily in China, to manufacture products for major customers such as Toys ``R'' Us Inc. and Wal-Mart Stores Inc. The company's primary warehouse facilities are in Union City, Calif.
Galoob said in a statement that the ``Star Wars'' agreement also calls for advance payments against future royalties of $140 million as Lucasfilm Ltd. releases the three new films.
