Submitted by: Group 2

Acquisition Analysis- ● Shrishti Jain (133104)

Disney & Pixar

● Sakshee Singh (281183)
● Samkit Jain (133138)
● Diksha Arya (024074) 1
● Shivam Sharma (281184)
Topics to be Covered
● Introduction
● Merger Rationale
● Internal Analysis ( Disney & Pixar)
● Opportunities Identified
● Challenges for the Acquisition
● Cultural Integration
● Role of Leadership and Communication
● Post merger Analysis
● Conclusion

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Walt Disney
Animation Studios
Founded on Oct 16,1923 by brothers
Walt and Roy Disney
• Headquartered at Burbank,
California
• World’s second largest broadcasting
and cable company
• Owner of 14 theme parks & several
TV networks such as ABC & ESPN
• Walt Disney’s first original animated
character – Oswald the Lucky Rabbit
PIXAR
• Began in 1979 as the Graphics Group,
part of the computer division of
Lucasfilm • Spin-out as a corporation in
1986 with funding by Apple Inc. co-
founder Steve Jobs
• 14 feature films and several short
films
• Released its first film in 1995 – Toy
Story • The film grossed $362 million
and became the biggest grosser of 1995
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A History of Poor Relations
● Both companies had a history of acrimony
● Steve Jobs abruptly called off talks to continue a lucrative partnership
with Disney
● Jobs had often clashed with the CEO Michael Eisner
● Eisner disparaged an Apple advertising slogan before a Congressional
committee
● Analysts, investors and media pundits also questioned the hefty price
Disney paid for a small studio that released only one movie a year
● In an industry where corporate marriages often create internal warfare,
Disney and Pixar have found a way to make it work

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 Merger
Rationale
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1.Synergies seen in combining successful animation experts
from Pixar and studio experts from Disney.

2. Weakness of Pixar to get the required capital. Pixar could

not get the cash and goods to generate income and, therefore,
this merger would allow the firm to unite with Disney in order
to ease the costs.

3. The merger in May 2006 ensured that Disney still received

Pixar’s technology . Pixar was the main processor of computer
based animation technology of which Disney so desperately
needed in order to make their production line more efficient.

4. Branding of films-Disney Pixar. Branding is a way of

increasing the price of merchandise, film tickets and would
therefore generate more revenue
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 TIMELINE
● Beginning their relationship, Disney and Pixar made an agreement
that stated they would produce and distribute one computer
generated animated movie together. That movie was known as Toy
Story, the world’s first computer animated feature film
● Because of the popularity and success of Toy Story, which was
released in November of 1995, Disney and Pixar developed another
contract in 1997 that agreed to jointly produce a total of five movies
over the next ten years.
● Nearing the end of the Disney and Pixar collaboration deal in January
of 2006, the Walt Disney Company announced they would be acquiring
Pixar Animation Studios for $7.4 billion in an all-stock transaction
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Internal Analysis

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Internal Analysis- Disney Differences between
Recurring Losses the Leadership
Annual Shareholder return at Steve Jobs and Micheal Eisner
-3% over five years were never on the same page

Brand Image Sluggish Tech

Disney Power was Very slow progress in 2D
depleting amongst its and 3D computer
audience animated Films

Low Morale Competition

Low morale of the Employees Pixar and Dreamworks were
closing in the Animated Movie
Space
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Internal Analysis

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Internal Analysis- Pixar
State of the
Art facility

Peer Culture
where every Unique
employee Company
supports the Culture
other

Nurturing
Environment
People First
with Open
Approach
Communicatio
n
Self
Expression
and Diversity
of Thought
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Opportunities Identified
01 Disney’s access to Pixar’s proprietary technology

02 Decrease in Competition

03 Increase in Revenue Streams from

various channels

04 Increase in
market power

05
Increased industry attractiveness

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 Challenges for the Acquisition
Different Goals
and Missions-
Failed mergers in
Disney’s failure
the media space
in exploration
and innovation

Lack of Respect & Trust

in the merger from
Jobs due to History
Different
Cultures
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How are they making it work?
● Effective communicating changes to employees
● More unusual decisions on drawing up an explicit map of what elements of
Pixar would remain unchanged
● Robert Iger agreed to an explicit list of guidelines for protecting Pixar’s
creative culture
● Pixar employees were able to keep their relatively plentiful health benefits
and weren’t forced to sign employment contracts
● The sign on Pixar’s front gate would remain unchanged
● Disney, despite its legendary corporate identity and strong will, held back
● Pixar kept its email system and no one was shifted to Walt Disney World in
Florida to work a shift
● No Pixar telephone operators had to end with “Have a magical day” 14
 Pixar talent was
retained and
injected into
Disney’s
workforce
Knowledge
Management
Effective Top
Down
communication
adopted by the
Unique companies’
representation leadership
of company
values
Consultative approach
adopted by Disney to
improve their processes
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Cultural Integration
01
Disney did not consume Pixar but let its culture
remain intact

02 Pixar employees were able to maintain their

old identity within the enlarged group

Disney changed certain ways that Pixar

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followed, yet Disney's original
animation culture was lost

04 Pixar’s top managers were given positions at

Disney-Pixar

05 Disney Steering Committee was formed

post merger

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Role of Leadership
& Communication

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Role of Leadership and Communication
The existence of transformational leadership

. Sharing a New Strategic Vision

The Importance of Team Learning

The development of learning teams and organizational

learning

The creation of a learning culture

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POST MERGER ANALYSIS
● Following the acquisition, Pixar successfully designed movies after
movies, releasing it under the Disney name.
● The problem here is that Disney had lost the animation culture they
once had.
● During the change, some compromises were necessary and the loss
of Disney’s original animation culture was clearly one.
● Media acquisitions are notorious for failure and they often create
internal warfare, but overall, the Disney Pixar merger went
surprisingly well.
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Conclusion
Innovative ideas and
Technology
introduced in Disney
Animation Studios

Identity of Pixar was

preserved with a patient
integration and unchanged
Employee policies

Revenue, Cost and Vitality

synergies attained. Frozen
defined the success of
Disney- Pixar acquisition
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Thank
You!

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