Disney buys Pixar
House of Mouse is teaming up with Pixar in a $7.4 billion deal. Steve Jobs to become board member at Disney. By Paul R. La Monica, CNNMoney.com senior writer
January 25, 2006: 8:44 AM EST

NEW YORK (CNNMoney.com) - Mickey Mouse and Nemo are now corporate cousins. Walt Disney has announced that it is buying Pixar, the animated studio led by Apple head Steve Jobs, in a deal worth $7.4 billion.

Speculation about a deal being imminent raged on Wall Street for the past few weeks. Disney has released all of Pixar's films so far, but the companies' current distribution deal was set to expire following the release of this summer's "Cars." The merger brings together Disney's historic franchise of animated characters, such as Mickey, Minnie Mouse and Donald Duck, with Pixar's stable of cartoon hits, including the two "Toy Story" films, "Finding Nemo" and "The Incredibles."

Steve Jobs, the CEO of Apple and Pixar, will become a board member of Disney following the closing of Disney's purchase of Pixar. QUICK VOTE
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"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," said Jobs in a statement. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world."

As part of the deal, Jobs will become a board member of Disney, the companies said. And John Lasseter, the highly respected creative director at Pixar who had previously worked for Disney, will rejoin the House of Mouse as chief creative officer for the company's combined animated studios and will also help oversee the design for new attractions at Disney theme parks.

The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving" growth across our businesses," said Disney CEO Robert Iger in a written statement.

During a conference call with analysts Tuesday, Iger said that acquisition discussions had been going on for the past several months. Jobs added that after a "lot of soul searching," he came to the conclusion that it made the most sense for Pixar to align itself with Disney permanently instead of trying to distribute films on its own or sign with another movie studio partner.

According to the terms of the deal, Disney (Research) will issue 2.3 shares for each Pixar share. Based on Tuesday's closing prices, that values Pixar at $59.78 a share, about a 4 percent premium to Pixar's current stock price. Shares of Pixar (Research) fell slightly in regular trading on the Nasdaq Tuesday but gained nearly 3 percent in after-hours trading. The stock has surged more than 10 percent so far this year o...

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