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News: Disney purchases Pixar


arrowfanman

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ABC News: http://abcnews.go.com/Business/story?id=1536674&page=1

 

Jan. 24, 2006 — The Walt Disney Company took a big step today toward bolstering its position in the film business. It has agreed to purchase Pixar Animation Studios for $7.4 billion. The deal combines Pixar with Disney's animation unit and represents the union of two huge forces in animation, from the old world of films and the new.

 

Pixar CEO Steve Jobs will become Disney's largest shareholder, giving him an extraordinary position at the confluence of technology and entertainment, computers and film, as well as a commanding presence in the music industry through Apple's iTunes Music Store. Jobs will also be appointed to Disney's Board of Directors.

 

For Disney, and its new CEO Robert Iger, the deal secures what has been a hugely valuable source of animated hits.

 

The purchase is an all stock deal in which 2.3 Disney shares will be issued for each Pixar share. The sale is expected to completed by this summer.

 

In recent years, Disney, the parent company of ABC News, has struggled to produce the types of blockbuster animated movies that the company built its reputation on. Disney hopes the deal will give it the most dominant animation production house in the industry. In past joint productions, Disney and Pixar's films have generated more than $3 billion, including hits like the "Toy Story" series and "The Incredibles." The company is hopeful that purchasing Pixar will return Disney to the dominant player in the animation field.

 

The partnership between the two companies deteriorated in recent years when Jobs openly feuded with longtime Disney CEO Michael Eisner. Robert Iger, who succeeded Michael Eisner as Disney's CEO in October, made a priority of smoothing over relations with Jobs and was in the midst of renegotiating the distribution pact, which expires in June with the release of "Cars."

 

The combined company is expected to maintain the basic working structure that Disney and Pixar used before, with Disney providing distribution and co-financing for Pixar's computer-animated features.

 

One of the questions surrounding the negotiations was what would happen to Pixar Executive Vice President John Lasseter, who has a track record of producing money-making movies. Lasseter will be the chief creative officer of the animation studios, as well as principal creative advisor at Walt Disney Imagineering.

 

Pixar shares have risen since late last year, as rumors of a possible merger or distribution deal with Disney attracted traders to the company's stock. Some analysts suggest that much of the "premium" Pixar shareholders could expect from a merger is already priced into the company's market capitalization.

 

For the Walt Disney Co. one of major challenges facing Iger is to bolster Disney's stock price, which has stagnated in recent years.

 

Yup...its kinda like that. I'm a bit sketchy on it, but then again, I know nothing about business! All I know is that I am guarenteed more Pixar films, so I am cautiously pleased.

 

-Jahan

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One of the questions surrounding the negotiations was what would happen to Pixar Executive Vice President John Lasseter, who has a track record of producing money-making movies. Lasseter will be the chief creative officer of the animation studios, as well as principal creative advisor at Walt Disney Imagineering.

 

-Jahan

 

That part of the article is the part that intrigues me the most.

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One of the questions surrounding the negotiations was what would happen to Pixar Executive Vice President John Lasseter, who has a track record of producing money-making movies. Lasseter will be the chief creative officer of the animation studios, as well as principal creative advisor at Walt Disney Imagineering.

 

-Jahan

 

Is it safe to say "let the second golden age at Disney Feature Animation begin" yet?

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