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Disney buys Pixar for $7.4 billion

updated 04:45 pm EST, Tue January 24, 2006

Disney buys Pixar

The Walt Disney Company has announced it is buying longtime partner Pixar Animation Studios Inc. for $7.4 billion in stock. According to the AP, the deal "could restore Disney's clout in animation while vaulting Pixar CEO Steve Jobs into a powerful role at the media conglomerate. Under the agreement, 2.3 Disney shares will be issued for each Pixar share. Disney announced the deal after the close of trading on Tuesday. Pixar CEO Steve Jobs will join Disney's board of directors, while Pixar President Ed Catmull will serve as president of the combined Pixar and Disney animation studios and Pixar Executive Vice President John Lasseter will be chief creative officer of the animation studios. Jobs' role as a Board member of Disney, however, may bring conflicts with his CEO role at Apple, according to several reports.

"This acquisition combines Pixar's preeminent creative and technological resources with Disney's unparalleled portfolio of world-class family entertainment, characters, theme parks and other franchises, resulting in vast potential for new landmark creative output and technological innovation that can fuel future growth across Disney's businesses," Disney said.

Pixar has won an incredible 20 Academy Awards throughout its history, and is expected to significantly enhance Disney's animation efforts.

"The talented Pixar team has delivered outstanding animation coupled with compelling stories and enduring characters that have captivated audiences of all ages worldwide and redefined the genre by setting a new standard of excellence," Disney added.

Pixar executive vice president John Lasseter will, in addition to his other duties, serve as Principal Creative Advisor at Walt Disney Imagineering, where he will provide his expertise in the design of new attractions for Disney theme parks around the world, reporting directly to Disney CEO Robert Iger.

Both Disney and Pixar animation units will retain their current operations and locations. "Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," said Steve Jobs. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world."

Pixar's 20-year creative track record includes the hits Toy Story, Toy Story 2, A Bug's Life, Monsters, Inc., Finding Nemo, and The Incredibles. Disney can also fully capitalize on Pixar-created characters and franchises on high-growth digital platforms such as video games, broadband and wireless, as well as traditional media outlets, including the media giant's theme parks, consumer products and live stage plays.

Disney first entered into a feature film agreement with Pixar in 1991, resulting in the release of Toy Story, which was hailed as an instant classic upon its release in November of 1995. In 1997, Disney extended its relationship with Pixar by entering into a co-production agreement, under which Pixar agreed to produce on an exclusive basis five original computer-animated feature films for distribution by Disney. Pixar is currently in production on the final film under that agreement, Cars, to be distributed by Disney on June 9th.

The Boards of Directors of Disney and Pixar have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antritrust Improvements Act, certain non-United States merger control regulations, and other customary closing conditions. The agreement will also require the approval of Pixar's shareholders. Jobs, who owns approximately 50.6 percent of the outstanding Pixar shares, has agreed to vote a number of shares equal to 40 percent of the outstanding shares in favor of the transaction.




by MacNN Staff

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Comments

  1. ibugv4

    Joined: Dec 1969

    0

    well, well..

    look who has ensured us that disney online will now be a new, and drastically different, media outlet? I see the Minnie Mouse Mac Mini in the future! :D

  1. actroutt

    Joined: Dec 1969

    0

    Pixar was fun

    while it lasted. I don't see this turning out good for Pixar

  1. pharmacopoeia

    Joined: Dec 1969

    0

    doesn't feel good...

    somehow this feels like bad news, but i'm not sure why. i guess Disney is just soo corporate and seems to turn everything into such commercial drivel that Pixar's creativity and "edge" may be endangered. somehow. personally, this just doesn't sound like good news. Apple, on the other hand, may benefit immensly from the potential additional marketing / exposure.

  1. gizmovision

    Joined: Dec 1969

    0

    I'm sorry it had to

    go down like this... I think Pixar being a separate entity from something like Disney is what gave it its extra something, but once a foot comes down it will be straight to DVDs for a long time to come. Its a shame Pixar never got out on its own I think it could have been even bigger...

  1. dashiel

    Joined: Dec 1969

    0

    re: pixar was fun

    lasseter is going to become creative head of the combined disney/pixar animation dept. this is a good thing. jobs on the board of disney is a good thing too. first of all for any new video distribution system to succeed you need two things: p*** and disney. i doubt apple itself will ever sell p***, but it was about the first non-apple video content available for the ipod. now steve will lock up disney distribution rights and boom ipod/h.264 is the standard video format for the next X years.

  1. 83caddy16v

    Joined: Dec 1969

    0

    uncertain

    as some analysts have mentioned, it will be interesting to see how Steve reacts to Disney doing deals with Microsoft, Google or another digital distribution mechanism that is not iTunes/iPod friendly.

    While the hope is there will be a big benefit for Apple, I hope there doesn't become too many conflicts of interest.

    I wonder if this is why Apple took a 1.63 drop today.

  1. pliny

    Joined: Dec 1969

    0

    :0

    :0

  1. kadavila

    Joined: Dec 1969

    0

    All things change

    The Intel chip thing, the acquisition of Pixar by Disney, it's all strange and uncertain, but we have to understand that nothing lasts forever. Most change is good.

    I am as leery about this as the next Apple FanBoy, but I am yet optimistic that Steve and Co. know what they're doing. They have a knack for doing things that are daring and against the grain while still yielding great results.

    In 5-10 years there will prolly only be one OS. H8 2 say it, but it shows maturity when one accepts hard truth.

  1. Feathers

    Joined: Dec 1969

    0

    not so good...

    Steve and the boys are great at product innovation but not so hot as businessmen. Don't forget the absolutely lousy deal Steve originally struck with Katzenberg between Disney and Pixar. Even the twelve year olds in Hollywood were laughing! In the words of an intrepid pilot..."I have a very bad feeling about this!"

  1. jimster

    Joined: Dec 1969

    0

    It needed to be done

    The issues with Pixar and Disney stemmed from the clash of the Egos. Steve Jobs and Michael Eisner. Apple loves and worships Steve as their savior. Disney loved Eisner. Disney for the past 10 years has been under the control of someone who used to care about the "magic" of Disney till Eisner became power hungry after Well died. Disney delined, selling assets and milking everything that it had. The Board of Directors at Disney finally had enough and forced Eisner out after the fallout with Pixar. That was the last straw. Who lost? Pixar? Nope. They could find another media outlet to distribute Pixar films. What this entire transaction spells out is the management of Pixar are placed in positions that will direct the course of Disney animation and future theme park rides. Disney bought Pixar and brought on board talent that is severely lacking at Disney. Creative juices to think of stories and attractions. Does any one doubt Steve is a total micro manager and wants things as perfect as they can be? Jobs will bring in perfection which Disney has lacked for years. New board seat, Head of Animation and Heat of theme park attraction developement. Sounds good for Pixar, sounds good for Disney and it could be boom for Apple with influence on moving more media to Apple.

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