Disney Agrees to Acquire Pixar in a $7.4 Billion Deal - New York Times
The Walt Disney Company said Tuesday that it would acquire Pixar Animation Studios for $7.4 billion in a stock deal that not only gives Pixar's chief executive, Steven P. Jobs, a powerful role in Hollywood but also stirs hopes for rekindling the animated storytelling tradition at Disney.I feel a little disappointed that Pixar isn't going it alone, but one can be forgiven for guessing that, for all their success, Jobs' other company was uncomfortable with the amount of risk they'd have to take to pull a Lucasfilm.
Since Disney held sequel rights to the movies covered under the current contract—they could make Toy Story 3, A Bug's Life 2, Monsters, Inc 2, etc—they had a powerful bargaining chip. Pixar would have had to put cash on the table to compensate Disney. With Disney's sequel rights, Pixar was a much less attractive partner for any other studio (why partner with Pixar when Disney could leverage their brand equity)? Worse still was the prospect of Disney releasing inferior quality sequels, damaging Pixar's reputation.
In the end it looks like Pixar used the leverage they had to their best advantage, securing a distribution partner and the power to control the products issued under their brand names. They've installed Lasseter and Catmull atop the Disney animation organization, and Jobs becomes the company's largest shareholder. In a way, Disney's leverage only succeeded in forcing a reverse-takover of their core animation business by a smaller, more innovative, more successful company.
As for Jobs, he's realized a neat 225x return on his original $10MM investment in 1986. Not bad.
