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Disney buys Pixar, Formal Announcement

Disney to Acquire Pixar; Long-time Creative Partners Form New Worldwide
Leader in Quality Family Entertainment

BURBANK, Calif. & EMERYVILLE, Calif., Jan 24, 2006 (BUSINESS WIRE) — The
Walt Disney Company (DIS):

— Ed Catmull Named President of the Combined Pixar and Disney Animation
Studios and John Lasseter Named Chief Creative Officer; Steve Jobs to Join
Disney’s Board of Directors

— Disney Increases Stock Repurchase Authorization

Furthering its strategy of delivering outstanding creative content, Robert
A. Iger, President and Chief Executive Officer of The Walt Disney Company
(DIS), announced today that Disney has agreed to acquire computer animation
leader Pixar (PIXR) in an all-stock transaction, expected to be completed
by this summer. Under terms of the agreement, 2.3 Disney shares will be
issued for each Pixar share. Based on Pixar’s fully diluted shares
outstanding, the transaction value is $7.4 billion ($6.3 billion net of
Pixar’s cash of just over $1 billion) (Based on Disney’s closing share
price of $25.52 as of 1/23/06).

This acquisition combines Pixar’s preeminent creative and technological
resources with Disney’s unparalleled portfolio of world-class family
entertainment, characters, theme parks and other franchises, resulting in
vast potential for new landmark creative output and technological
innovation that can fuel future growth across Disney’s businesses.
Garnering an impressive 20 Academy Awards, Pixar’s creative team and global
box office success have made it a leader in quality family entertainment
through incomparable storytelling abilities, creative vision and innovative
technical artistry.

“With this transaction, we welcome and embrace Pixar’s unique culture,
which for two decades, has fostered some of the most innovative and
successful films in history. The talented Pixar team has delivered
outstanding animation coupled with compelling stories and enduring
characters that have captivated audiences of all ages worldwide and
redefined the genre by setting a new standard of excellence,” Iger said.
“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.”

Pixar President Ed Catmull will serve as President of the new Pixar and
Disney animation studios, reporting to Iger and Dick Cook, Chairman of The
Walt Disney Studios. In addition, Pixar Executive Vice President John
Lasseter will be Chief Creative Officer of the animation studios, as well
as Principal Creative Advisor at Walt Disney Imagineering, where he will
provide his expertise in the design of new attractions for Disney theme
parks around the world, reporting directly to Iger. Pixar Chairman and CEO
Steve Jobs will be appointed to Disney’s Board of Directors as a
non-independent member. With the addition of Jobs, 11 of Disney’s 14
directors will be independent. 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. “Now, everyone can focus on what is most important, creating
innovative stories, characters and films that delight millions of people
around the world.”

“Pixar’s culture of collaboration and innovation has its roots in Disney
Animation. Our story and production processes are derivatives of the Walt
Disney `school’ of animated filmmaking,” said Dr. Catmull. “Just like the
Disney classics, Pixar’s films are made for family audiences the world over
and, most importantly, for the child in everyone. We can think of nothing
better for us than to continue to make great movies with Disney.”

The acquisition brings to Disney the talented creative teams behind the
tremendously popular original Pixar blockbusters, who will now be involved
in the nurturing and future development of these properties, including
potential feature animation sequels. Pixar’s 20-year unrivaled creative
track record includes the hits Toy Story, Toy Story 2, A Bug’s Life,
Monsters, Inc., Finding Nemo and The Incredibles. Disney will also have
increased ability to fully capitalize on Pixar-created characters and
franchises on high-growth digital platforms such as video games, broadband
and wireless, as well as traditional media outlets, including theme parks,
consumer products and live stage plays.

“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,” said Lasseter. “For 20 years we have created our films in the
manner inspired by Walt Disney and the great Disney animators — great
stories and characters in an environment made richer by technical advances.
It is exciting to continue in this tradition with Disney, the studio that
started it all.”

“The wonderfully productive 15-year partnership that exists between Disney
and Pixar provides a strong foundation that embodies our collective spirit
of creativity and imagination,” said Cook. “Under this new, strengthened
animation unit, we expect to continue to grow and flourish.”

Disney first entered into a feature film agreement with Pixar in 1991,
resulting in the release of Toy Story, which was hailed as an instant
classic upon its release in November 1995. In 1997, Disney extended its
relationship with Pixar by entering into a co-production agreement, under
which Pixar agreed to produce on an exclusive basis five original
computer-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.

The Boards of Directors of Disney and Pixar have approved the transaction,
which is subject to clearance under the Hart-Scott-Rodino Antritrust
Improvements Act, certain non-United States merger control regulations, and
other customary closing conditions. The agreement will require the approval
of Pixar’s shareholders. Jobs, who owns approximately 50.6% of the
outstanding Pixar shares, has agreed to vote a number of shares equal to
40% of the outstanding shares in favor of the transaction.

The Disney Board was advised by Goldman, Sachs & Co. and Bear, Stearns &
Co. The Pixar Board was advised by Credit Suisse.

Separately, the Disney Board approved the repurchase of approximately 225
million additional shares, bringing the Company’s total available
authorization to 400 million shares. Since August 2004 through the end of
December 2005, Disney has invested nearly $4 billion to purchase nearly 155
million shares. Disney anticipates further significant share repurchases
going forward, reflecting Disney’s continued commitment to returning value
to shareholders over time.

About The Walt Disney Company:

The Walt Disney Company (DIS), together with its subsidiaries and
affiliates, is a leading diversified international family entertainment and
media enterprise with four business segments: media networks, parks and
resorts, studio entertainment and consumer products. Disney is a Dow 30
company, had annual revenues of nearly $32 billion in its most recent
fiscal year, and a market capitalization of approximately $50 billion as of
January 23, 2006.

Investor Conference Call:
An investor conference call will take place at approximately 2:15 p.m. PT /
5:15 p.m. ET today, January 24, 2006. To listen to the Webcast, turn your
browser to or If you cannot participate in the live Webcast,
re-plays will be available for domestic callers at (888) 286-8010 (PIN
56666399) and for international callers at (617) 801-6888 (PIN 56666399),
or at until 4:00 p.m. PT on Tuesday,
February 7, 2006. An .mp3 version of this Webcast replay will also be
available approximately 24 hours after the Webcast concludes at

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