Disney, Pixar agree to $7.4 billion dealhttp://www.marketwatch.com/1.gif By Russ Britt, MarketWatch Last Update: 4:41 PM ET Jan. 24, 2006 LOS ANGELES (MarketWatch) -- After months of negotiations, Walt Disney Co. will acquire Pixar for $6.3 billion in stock plus $1.1 billion of the computer animation specialist's cash, the companies said Tuesday.
The deal combines the two companies that have been partners for more than a decade, and gives Disney a leg up in animated films, where it has been struggling in recent years.
Both Disney and Pixar shares were halted just prior to the announcement, which occurred shortly after the closing bell. Disney ended trading Tuesday up nearly 2% while Pixar was off 1.2%.
Under terms of the deal, Pixar Chief Executive Steve Jobs will take a seat on Disney's board. It is believed he will become the company's largest shareholder.
Pixar will be combined with Disney's animation department and the new operation will be headed by Ed Catmull, Pixar's president. Catmull will report to Disney Chief Executive Robert Iger and studio chief **** Cook.
John Lasseter will become chief creative officer of the animation studios as well as principal creative advisor at Walt Disney Imagineering.
Two years ago, Pixar sought to sever its ties to Disney with former Chief Executive Michael Eisner getting the blame for souring the relationship with its successful animation partner. Pixar has yet to release a flop from the six animated features it has produced thus far.
Talks resumed after Eisner left the company last year, giving way to Iger, who immediately sought to renew the company's relationship with Pixar and resumed talks to continue their distribution arrangement. That later blossomed into takeover talks.
Disney has distributed Pixar's films over the last 11 years, beginning with 1995's "Toy Story." The other films in Pixar's library include "A Bug's Life," "Toy Story 2," "Monsters Inc.," "Finding Nemo" and "The Incredibles." The two first formed their partnership in 1991.
One more film remains under the current Disney-Pixar arrangement, "Cars," which is due to be released in June.
Russ Britt is the Los Angeles bureau chief for MarketWatch.