BUSINESS LAW

ASSIGNMENT 2

Disney and Pixar Merger

Submitted to Submitted by
Dr.V Y John SATHEESH V S-JU2022MBA11751
Ashwini S - JU2022MBA12351
Raswanth TR-JU2022MBA14436
Tejasaipavan Suragowni -JU2022MBA14475
Kerthiga RB -JU2022MBA13181
INTRODUCTION:
Need for merger:
1.Mutual benefit
2.Increase sales
3.Expansion of Business

4.Diversification of Risks
5.Integration of two companies
REASONS FOR THE MERGER

• Disney by acquiring Pixar was getting the pool of the talent in both creative and technical
terms.
• Pixar have helped Disney in content generation with the advice of experts in Disney for
distribution resulting in the maximizing revenue amount for both of the domains.
• This deal will be beneficial in terms of gaining monetary support from Disney.
• Getting acquired by Disney would provide Pixar a better position in the market against
competitors like Lucasfilm, DreamWorks, universal, etc.
 SWAP RATIO DECIDED IN THE MERGER

• Disney acquired shares worth $7.4 billion in Pixar and made it Disney’s TITLE YEAR REVENUE
Cars 2 2011 $552 M
subsidiary. Toy story 3 2010 $1063 M
• Pixar Animation Studios forever impacted the future of filmmaking with the UP 2009 $731 M
Wall E 2008 $521 M
release of its first feature film, Toy Story. The film went on to become the
Ratatouille 2007 $624 M
highest grossing film of 1995 with $362 million.
•  Disney announced that it had agreed to buy Pixar for approximately $7.4
billion. Disney offered 2.3 shares of its stock for each Pixar share. That’s a
3.8% premium on Pixar’s closing price of $57.57.
STATUS OF THE COMPANIES

• On May 5, 2006 the two esteemed companies Disney and Pixar merged. Disney acquired shares worth $7.4 billion in Pixar and made it
Disney’s subsidiary.
• Prior to the merger in 1997, after the release of Toy Story, a 10-year, 5-picture deal was signed, evenly splitting production costs and
profits on subsequent movies.
• In addition, Disney collected 10 to 15 percent of each film’s revenue as a distribution fee.
• There were talks of Pixar searching for new distributors. But with Mr. Iger taking the position of Disney’s CEO the conflicts between
Pixar and Disney were resolved and on January 24, 2006, Disney announced that it had agreed to buy Pixar for approximately $7.4
billion.
• The key reasons for the success of the merger of the two companies was that investors saw potential for disney to leverage on pixar’s
computer animated character to be used in its vast networks. One successful example was “cars”.
• The revenue in retail products from “cars” was over $5 million. Pixar’s willingness to change so as to be a part of the international
conglomerate helped. Pixar not only developed new movies but also sequels of original ones. 
PRESENT STATUS OF THE COMPANIES

• Pixar not only developed new movies but also sequels of original ones. The experience of bob iger in the field of
merger helped the two companies greatly.
• The companies not only followed normal tactics for successful mergers but also came with some different ones.
• Pixar created a list of things that would not be changed to support the belief “we’ve never had to go back and
look at it.
• Bob iger ensured that pixar employees get mixed in the new environment. He gave pixar employees new
responsibilities and tasks to increase the efficiency of disney. Finally the transformational leadership at pixar was
brought to disney.
• Their ability to lead and motivate employees in a way that they easily adapt to the dynamic environment was
legend and disney adopted it.
CONCLUSION:
The merger of Walt Disney and Pixar is one of the most successful corporate mergers in these
years. This acquisition was of benefit for both companies. For Disney, it was of benefit because
of innovative ideas in the animation studio and the technology Pixar had. This merger had given
many blockbuster movies till now. The main reason for the success of the merger was the
negotiations done by both companies.
THANK YOU……!