Is Pixar Now Just Disney?

Burbank, CA and Emeryville, CA ... announced today that Disney has agreed to acquire computer animation leader Pixar (NASDAQ: PIXR) in an all-stock transaction, expected to be completed by this summer....

Walt Disney, the media and entertainment group, put animation back at the heart of its strategy when it announced the $7.4bn (£4.1bn) acquisition of Pixar, the company behind Finding Nemo and Toy Story last night. The all-share deal makes Steve ...

As part of the agreement, Disney will issue 2.3 shares for every share of Pixar stock. (Pixar has $1 billion in cash.) That would value the deal at $59.78 a Pixar share, based on Disney's $25.99 closing price on Tuesday.

The talks stalled in 2004 after Pixar demanded that it own 100 percent of all future films and pay Disney a straight distribution fee, similar to the deal “Star Wars” creator George Lucas had with Twentieth Century Fox.

After a few years, Lasseter and Catmull were able to successfully transfer the basic principles of the Pixar Braintrust to Disney Animation, although meetings of the Disney Story Trust are reportedly "more polite" than those of the Pixar Braintrust. Catmull later explained that after the merger, to maintain the studios' separate identities and cultures (notwithstanding the fact of common ownership and common senior management), he and Lasseter "drew a hard line" that each studio was solely responsible for its own projects and would not be allowed to borrow personnel from or lend tasks out to the other.

It created “Toy Story,” the world’s first computer-animated feature film, and other hits like “Finding Nemo.” · Disney’s $7.4 billion purchase of Pixar in 2006 made it an instant leader in animated films.

The completion of Disney's Pixar acquisition, however, nullified this distribution arrangement. Unlike the earlier Pixar/Disney deal used for the earlier films, this one has the following caveats: Pixar is responsible for 100% of the production ...

Although the film was already deep into production before the merger finalized, it became the first Pixar release under Disney ownership.

Successful acquisitions don’t require complete integration. Disney allowed Pixar to keep its creative independence while benefiting from Disney’s resources, showing that businesses can expand without losing their unique strengths. The one thing we were really adamant about was that the two studios not be integrated. We established an absolute rule, which we still adhere to, that neither studio can do any production work for the other. For me, local ownership is really important.