The two companies co-financed the 2005 hit, 'The Chronicles of Narnia: The Lion, the Witch and the Wardrobe", based on the first volume in the C.S. Lewis children's book series.

That film grossed US$745 million (S$1.08 trillion) at box offices worldwide and became a top-selling DVD for the year, leading Disney to tout it as a franchise with the potential for up to seven films.

The sequel, 'Prince Caspian,' was released in May 2008 but competition from 'Iron Man' and 'Indiana Jones and the Kingdom of the Crystal Skull' cut its global box office take to US$420 million.

The title fared better in DVD release, becoming one of the top holiday sellers since its Dec 2 release.

Disney, which distributed the 'Narnia' films worldwide, got a 50 per cent cut of profits from the special effects-laden franchise, which cost an estimated US$180 million to US$200 million to make.

Disney had an option, which it will not exercise, to make a third film, 'The Voyage of the Dawn Treader,' that had been scheduled for release in 2010. -- REUTERS