View this article at: http://dev.macnn.com/articles/06/01/06/disney.may.buy.pixar
Friday, Jan 06, 2006 10:30am
Rumors of Pixar sale to Dis...
Rumors are circulating that Pixar Animation Studios and Walt Disney are on the brink of signing a megadeal, either the possible sale of Pixar to Disney or a new distribution pact between the two companies. Continuing talks have reportedly been migrating toward Disney acquiring all or part of Pixar, which would make Steve Jobs--CEO of Pixar and Apple Computer--a major Disney shareholder, and possibly the media giant's chairman. Some analysts have speculated that by selling Pixar, Jobs could focus on running Apple, while others doubt the executive is willing to sell even a part of Pixar, which he bought in 1986 from George Lucas for $10 million. Pixar's market value is now almost $7 billion, according to a report from bizjournals.com. [updated]

Under its current deal, Pixar creates and produces movies while Disney markets and distributes them worldwide, for a fee. The two companies share all costs and profits that turn up from the agreement. As Pixar has grown, however, Jobs has said he wants a deal with Disney, or another studio, that would allow Pixar to keep the profits from its films while paying its partner a distribution fee only, according to the report. Past talks between Pixar and Disney fell through in January of 2004 as a result of friction between Jobs and Disney's then-CEO Michael Eisner. Iger, Disney's new CEO, has apparently been expressing interest in a new distribution deal to Pixar. Acquisition possible? Analysts are speculating about whether the rumored acquisition would benefit Disney, since it would probably pay a premium price for the film company. "Even under optimistic assumptions, the deal would likely be dilutive to Disney for the foreseeable future," said Michael Savner, Bank of America Securities analyst. "We also expect that there could be integration/cultural issues," he wrote. "Arguably, what has made Pixar so successful is its independent culture and its singular focus on quality. The obvious risk to an acquisition is that both are sacrificed."