In a deal with more than US7.4 billion, Disney plans to quieten recent critic Steve Jobs.
The deal, approved by both boards and subject to various anti-trust approvals, also requires shareholder approval, Apple CEO and Pixar Chairman and CEO, Steve Jobs, owns slightly less than 1 per cent of the company and has agreed to cast 40 per cent of the company’s shares in favour of the deal.
In return, Jobs gets a seat on the Disney Board.
The transaction includes no cash, except the US1 billion cash Pixar has in the bank, which will transfer to the combined entity. Under terms of the agreement, 2.3 Disney shares will be issued for each Pixar share pricing the company at around US$6.3 billion net of Pixar’s cash.
A deal has been rumoured for months with Jobs going on the record as being interested in a Pixar sale last October. The two companies have worked in partnership for 15 years. But Jobs has been a recently vocal critic of the Disney animation studios which produced its first 3D computer animation feature “Chicken Little” following a major refit of the Disney studios.
“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.”
The acquisition brings to Disney the talented creative teams behind the tremendously popular original Pixar blockbusters, such as Toy Story, Monsters, Inc., Finding Nemo and The Incredibles.
Apart from the creative genius and content creation abilities, Disney also buys rights to the catalogue allowing it to capitalise on the 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.
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.