After orchestrating the media and entertainment company's move into streaming, Disney (NYSE:DIS) dropped a bombshell Tuesday afternoon, announcing that revered CEO Bob Iger would step down as CEO -- effective immediately -- handing his duties over to Bob Chapek, who most recently served as chairman of Disney's parks, experiences, and products segment.

Iger isn't abandoning ship just yet, however. He will assume the role as executive chairman and will direct the company's "creative endeavors" while continuing to lead the board until his current contract expires at the end of 2021.

Disney CEO Bob Iger on stage with The Walt Disney Company logo =projected on a screen behind him.

Bob Iger leaves a powerful legacy. Image source: Disney.

Iger was an instrument of change

Iger assumed the role of CEO in 2005 and immediately put his stamp on the company that would be his legacy. Iger is credited with engineering the Pixar buyout in 2006 for a whopping $7.4 billion, which not only added a successful animation studio but also helped revive the company's own Disney Animation segment, which was floundering at the time. The ink on the deal was barely dry when it was followed in swift succession with the game-changing acquisition of Marvel Entertainment in 2009 and Lucasfilm for $4 billion in 2012.

Iger's leadership was instrumental in turning Disney into a media powerhouse. One of his most ambitious moves was orchestrating the $71.3 billion acquisition of the numerous movie and television assets from 21st Century Fox, a deal that closed early last year. This brought Disney a host of content to help feed its streaming ambitions, as well as giving it operational control of top-string streaming service Hulu.

The announcement comes fresh on the heels of Disney's own entry into the streaming video market, with the highly successful debut of the company's flagship offering Disney+. The service launched to much fanfare in early November, and earlier this month the company's quarterly earnings report revealed that Disney+ had attracted a massive 28.6 million subscribers by early February.

In the 15 years since Iger took charge of Disney, the stock has risen over 400%, more than 1.5 times the 155% gains of the S&P 500 -- not bad for a stodgy blue-chip stock.

An old hand

Iger noted that Chapek will be the seventh CEO in Disney's nearly 100-year history, saying in a statement: "[H]e has proven himself exceptionally qualified to lead the Company into its next century." The heir to the Disney throne has been with the House of Mouse for nearly three decades, running the parks and resorts business, heading Disney's consumer products division, and also acting as president of distribution at Walt Disney Studios. 

"With the successful launch of Disney's direct-to-consumer businesses and the integration of Twenty-First Century Fox well underway, I believe this is the optimal time to transition to a new CEO," Iger said. "I have the utmost confidence in Bob and look forward to working closely with him over the next 22 months as he assumes this new role and delves deeper into Disney's multifaceted global businesses and operations, while I continue to focus on the Company's creative endeavors."

Investor takeaway

While the timing of this announcement is somewhat surprising, it was inevitable that Iger would eventually step down, after having postponed his retirement on at least four separate occasions prior to this announcement. Earlier this year, Iger joked, "I was going to say 'and this time I mean it,' but I've said it before," referring to his famous last words uttered before his most recent extension.

Change is never easy, but investors should rest easy in the knowledge that Iger hand-selected his replacement and will still be around to provide guidance for nearly two more years.