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Disney's pulled off an "Incredible" deal.
"The Lion King" and "Nemo" will be under one roof now following Disney's $7.4 billion all-stock deal to acquire animation powerhouse Pixar.
Pixar chief Steve Jobs, will become Disney's biggest individual shareholder and will get a seat on the company's board. The Apple Computer chief who sparked a revolution in media and entertainment with the iPod, is expected to use his muscle to pump up Disney as it continues to explore digital deals.
John Lasseter, the creative force behind Pixar's hit-making machine, has been named chief creative officer of the Disney Pixar animation studios. Pixar's president, Ed Catmull, was named president of the cartoon-making studio.
By acquiring Pixar, Disney chief Bob Iger is looking to vault Disney from animation laggard to box office champ. While Disney long ago forfeited its animation crown thanks to bombs like "Treasure Planet," Pixar has ruled for more than a decade with computer animated megahits like "Toy Story," "The Incredibles," and "Finding Nemo."
A current co-production and distribution deal between the two was set to expire this summer after the release of "Cars," and Jobs was threatening to walk.
"Nothing has created as much value (for Disney) as great animation," Iger told analysts in conference call yesterday. "Pixar has created some of the most memorable, high-quality films of this genre."
Jobs praised Disney's distribution assets, including its theme parks. "This looked to be the most exciting path to Pixar's future," he said on the call.
Disney will issue 2.3 Disney shares for each Pixar share. Disney closed yesterday at $25.99, up 47 cents. Pixar closed Tuesday at $57.57, down 70 cents. The $7.4 billion Disney is paying includes about $1 billion of Pixar cash.
The price was somewhat higher than Wall Street had expected. "It's a full price," said Peter Goldman, portfolio manager at Chicago Asset Management, which owns Disney shares.
Goldman and others questioned whether Disney was buying at a time when computer animation might be peaking. But he added, "I'm more enthusiastic about Disney with Pixar than I was without it."
Others wondered how Pixar's independent culture would fit with Disney's buttoned-up approach. Pixar will remain at its Emeryville, Calif.-based headquarters.
"Disney is bureaucratic. People roller-blade down the halls of Pixar," said Marla Backer, an analyst at Research Associates. "I don't think Pixar needs Disney looking over its shoulders."
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