Walt Disney Co. has agreed to buy Pixar Animation Studios Inc. in an all-stock transaction worth $7.4 billion.
Under terms of the agreement, 2.3 Disney shares will be issued for each Pixar share. The overall value of $7.4 billion based on Disney shares at Monday’s closing price of $25.52 includes $1 billion of Pixar cash.
The transaction is expected to be completed this summer. The boards of Disney and Pixar have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antritrust Improvements Act.
Pixar Chairman and Chief Executive Steve Jobs will be appointed to Disney’s board and become the company’s largest individual shareholder.
Pixar President Ed Catmull will serve as president of the new Pixar and Disney animation studios, reporting to Disney’s Chief Executive Bob Iger and Dick Cook, chairman of Walt Disney Studios.
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 Jobs in a statement.
Beyond acquiring the talents of the creative teams behind Pixar animated films such as “Toy Story” and “The Incredibles,” Disney also will be able to capitalize on Pixar-created characters and franchises on digital platforms such as video games, broadband and wireless, as well as via traditional media outlets, including 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.” In 1997, Disney extended its relationship by entering into a co-production agreement, under which Pixar agreed to produce five original 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 9.
Amid squabbles with then-Disney CEO Michael Eisner, Jobs said two years ago that he would end that relationship when it expires later this year and seek a new distribution partner. Iger has since made continuing the companies’ relationship a priority.
