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Disney buys Pixar for $7.4 bn
January 25, 2006 12:29 IST
Last Updated: January 25, 2006 12:58 IST
In a significant move, entertainment giant The Walt Disney Company plans to buy longtime partner Pixar Animation Studios Inc for $7.4 billion. The deal is seen to bolster Disney's position in the film business while vaulting Pixar CEO Steve Jobs into a powerful role at the media conglomerate.
This all-stock transaction deal (2.3 Disney shares for one Pixar share) will make Jobs, who also heads Apple Computer, the largest Disney shareholder. The sale is likely to completed by the summer of 2006. Jobs bought Pixar from George Lucas for $10 million in 1986.
For the past 12 years Disney has co-financed and distributed Pixar's animated films. The deal expires in June after Pixar delivers Cars. In past joint productions, Disney-Pixar films have generated more than $3 billion, and included hits like the Toy Story series and The Incredibles.
Disney' new CEO Robert Iger and Jobs also discussed the role that Apple could play as a distribution arm for Disney entertainment. As per Disney's present arrangement, some of the company's programming is available for sale at Apple's iTunes music store.
The conglomerate is likely to maintain the basic working structure, with Disney providing distribution and co-financing for Pixar's computer-animated features.
While Pixar's executive vice president John Lasseter will become chief creative officer of the conglomerate, Ed Catmull will serve as president of the new combined Pixar and Disney animation studios.
Disney was advised by Goldman Sachs Group Inc and Bear Stearns Cos and law firms Dewey Ballantine and Skadden, Arps, Slate, Meagher & Flom. Pixar was advised by Credit Suisse and law firm Wilson Sonsini Goodrich & Rosati.