Disney to Buy Pixar

Disney President and CEO Robert Iger today ended months of speculation by confirming that Disney will acquire animation studio Pixar. The all-stock transaction worth $7.4 billion is expected to be completed by this summer, combining the Disney brand and marketing machinery with Pixar’s industry-leading creative capabilities like never before.

With the acquisition, Pixar chairman and CEO Steve Jobs will be appointed to Disney’s board of directors as a non-independent member. Meanwhile, Pixar president Ed Catmull will become president of the new Pixar and Disney animation studios, reporting to Iger and Dick Cook, chairman of The Walt Disney Studios. Pixar executive VP John Lasseter will be chief creative officer of the animation studios, as well as principal creative advisor at Walt Disney Imagineering, where he will be involved in the design of new theme park attractions. With the addition of Jobs, 11 of Disney’s 14 directors will be independent.

Iger comments, “The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses. This investment significantly advances our strategic priorities, which include’first and foremost’delivering high-quality, compelling creative content to consumers, the application of new technology and global expansion to drive long-term shareholder value.”

“Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders,” says Jobs. “Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world.”

Lasseter chimes in, stating “For many of us at Pixar, it was the magic of Disney that influenced us to pursue our dreams of becoming animators, artists, storytellers and filmmakers. It is exciting to continue in this tradition with Disney, the studio that started it all.”

Disney and Pixar first teamed up in 1991 to create the revolutionary 3D animated feature Toy Story. A co-production agreement was struck in 1997, assuring the delivery of five original Pixar features for distribution by Disney. That contract was set to expire with the June 9 release of Cars, but now Pixar will remain involved with future Disney movies, including potential sequels to such hits as Toy Story, Monsters, Inc., Finding Nemo and The Incredibles.

Under terms of the agreement, 2.3 Disney shares will be issued for each Pixar share. Both the Disney and Pixar animation units will retain their current operations and locations.