DISNEY'S ACQUISITION OF PIXAR

SUBMITTED BY RASHEE IYER (34)  SANICA JAISWAL(38)  MIHIR KENIA(54)  JAYESH KURSEJA(67)  SHRUTI POL(122)  ASHWIN NAIR(179)

U. (October 16. Pepper. 1923) Walt and Roy Disney Burbank.S.S. California. Jr. Robert Iger President & CEO John E.(majority owner) Key people Revenue Employees Divisions .1 Billion (FY 2009)[ 150. (Chairman) Steve Jobs Shareholder & Board Member US$36.DISNEY Type Industry Founded Founder(s) Headquarters Public (NYSE: DIS Dow Jones Industrial Average Component Conglomerate Los Angeles.000 (2008) Walt Disney Motion Pictures Group Disney Music Group Disney-ABC Television Group Walt Disney Theatrical Radio Disney ESPN Inc. California. U.

PIXAR Type ‡Subsidiary of Disney ‡(Formerly public as NASDAQ: PIXAR ‡CGI animation ‡Motion pictures ‡Software Graphics Group (1979-1986) ‡1979 (1979) as Graphics Group ‡1986 (1986) as Pixar ‡Steve Jobs ‡Ed Catmull ‡Alvy Ray Smith Emeryville. U. California.com Industry Predecessor Founded Founder(s) Headquarters Key people Products Owner(s) Parent Website . General Manager. ‡Ed Catmull.S. Marionette The Walt Disney Company Walt Disney Pictures www. former CEO of Pixar Animation Studios and member of the Board of Directors at The Walt Disney Company RenderMan.pixar. President. Pixar Animation Studios ‡Steve Jobs. Walt Disney Animation Studios & Pixar Animation Studios ‡Jim Morris.

 In January 2006. .Overview  The case primarily examines the partnership agreement between Disney and Pixar and puts forth the incidents that led Pixar to look out for other partners. The deal was expected to be finalized by mid-2006.4 billion in stock. the US based media and entertainment company Walt Disney announced that it would acquire its animation partner Pixar for US$ 7.

 The first film under the agreement was Toy Story which was released in November 1995. under which Pixar agreed to produce five original computer-animated feature films.. in a span of ten years. Disney agreed to produce movies to be developed and directed by Pixar. The film was a huge success and generated over US$ 360 million in worldwide revenues. . Disney agreed to market and distribute these movies  Pixar was to receive compensation based on the revenue obtained from distributing these films and related products. According to the agreement.. Disney was to get 87% of the distribution proceeds. Including distribution fees. In May 1991. Disney extended its partnership with Pixar to a co-production agreement in 1997.  After the release of Toy Story. Disney entered into an agreement with Pixar for developing and producing three computer animated feature films.

6% equity stake in Pixar. 2005. (Apple).  But Robert Iger (Iger). CEO of Apple Computer Inc. revived talks with Pixar and finally succeeded in acquiring it. Pixar had announced that it would partner with another distribution company in 2006. He would also become a member of Disney's Board of Directors.  The deal expected to be finalized by May 2006 would make Steve Jobs (Jobs). who took over from Eisner on September 30. the major shareholder in Disney with an equity stake of approximately 7%. In January 2004. owing to differences with Disney's then CEO Michael Eisner (Eisner). This was because Jobs had a 50. .

3 shares for each Pixar share.78 a share.Mr Iger asked for Disney's content to be distributed over the Internet through Apple's online store . In October 2005. It started with five shows which included the popular shows Desperate Housewives and Lost Disney will issue 2.iTunes. . The deal values Pixar at $59. about a 4 percent premium to Pixar's current stock price. Iger and Jobs signed a deal to sell the past and current episodes of television shows of its ABC and Disney channels through iTunes.

Including distribution fees.Benefits of the Acquisition  Pixar was to receive compensation based on the revenue obtained from distributing films and related products. Disney was to get 87% of the distribution proceeds  Pixar would get a expert partner in the film business with great marketing capabilities. .

 For Disney." .  Pixar's potential value to Disney's 'family entertainment' brand and assets. that feed off this brand. with Lasseter. with whom it had teamed up to create block busters  The deal would bring the technology company Apple (through Steve Jobs) closer to Disney  Disney would get the necessary push in creativity which it seemed to lack. the creative genius behind Pixar's block busters. like theme parks and television. the acquisition gave it ownership of the world's most famous computer animation studio and its talent.

 The timing was also perfect as its own animation films had failed one after another. Analysts said this deal was more important to Disney than to Pixar.  The acquisition gave it ownership of the world's most famous computer animation studio and its talent.  Analysts said that having Jobs on the Disney board would certainly give the company the necessary technology edge and direction .

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