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.