Co. said it had agreed to buy Pixar Animation Studios
Inc. for around $7.4 billion in an all-stock deal. Pixar Chairman and Chief Executive Steve Jobs will take a seat on Disney's board and become the company's largest individual shareholder.
Under the terms of the agreement, 2.3 Disney shares will be issued for each Pixar share. Shares of Disney closed Tuesday at $25.99, valuing each Pixar share at $59.78. Shares of Pixar closed Tuesday at $57.57 on the Nasdaq Stock Market. In buying Pixar, Disney will get the $1 billion of cash Pixar has on hand.
Disney and Pixar put the finishing touches to the deal earlier today before presenting it to Pixar's board. Disney's board gave its Chief Executive Bob Iger the authority to complete a transaction.
"The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses," said Mr. Iger in a statement. (See the companies' statement.
Pixar President Ed Catmull will become president of Pixar and Disney's combined animation business. The deal also gives Pixar's creative force, John Lasseter, a leading role as chief creative officer of the combination. Mr. Lasseter will also serve as principal creative adviser to Walt Disney Imagineering, where he will help design new theme park attractions.
Disney and Pixar have been exploring ways to continue their lucrative partnership in on-off talks for several years. Disney, of Burbank, Calif., currently co-finances and distributes Pixar's movies under a deal that expires after Pixar's next movie, "Cars."
Two years ago, Mr. Jobs said he planned to end Pixar's relationship with Disney and seek another studio to be its distribution partner. When he took the reins from former CEO Michael Eisner in October, Mr. Iger set a priority of patching up relations with Mr. Jobs, who had had a fractious relationship with Mr. Eisner. Mr. Iger more recently has highlighted reviving Disney's animation business as a number one creative priority for the company.
"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," said Mr. Jobs in a statement. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world," he said.
A deal gives Disney control of the Emeryville, Calif., company that has pioneered the popular computer-animation genre with hits including "Toy Story" and "The Incredibles." Disney's own animation unit has had a difficult time in recent years, having stuck too long with traditional hand-drawn films that were increasingly unpopular with audiences. Disney itself is transitioning to computer-generated films, such as its recent "Chicken Little."