Jan 26 (Reuters) - Mattel Inc on Wednesday won the rights to produce dolls based on Disney royalty like Elsa and Jasmine, snatching back a highly lucrative license from archrival Hasbro Inc.

The reunion sent Mattel's shares surging 11% and is part of Chief Executive Ynon Kreiz's plan to turn the company around by getting more entrenched in big entertainment properties.

Mattel did not disclose the financial terms of the deal, which came seven years after it lost the rights and will also allow it to make dolls based on the "Frozen" movie franchise.

"This is a defining moment in our transformation," Kriez said in an interview.

"This has been a key priority as part of our turnaround and we worked very hard to win it ... the way we see it Disney Princess and Frozen are back home where they belong."

The toymaker has in recent years seen a resurgence in sales of the traditionally blonde Barbie doll thanks to new models with different skin tones, professions and attires that have struck a chord with a more diverse customer base.

Hasbro declined to comment but said it had renewed its licensing deal with Disney-owned Lucasfilm for "Star Wars" and would restart making products based on "Indiana Jones."

Mattel will start selling the toys that would also feature dolls based on popular movies such as "Aladdin," "Beauty and the Beast," "Brave," and "The Little Mermaid" from 2023.

The toymaker has struck similar deals with Disney for Pixar Animation Studio's "Toy Story" and "Cars" franchises, as well as "Lightyear." (Reporting by Praveen Paramasivam in Bengaluru; Editing by Saumyadeb Chakrabarty, Arun Koyyur and Aditya Soni)