Disney agrees to buy Pixar in $7.4bn deal

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The Independent Online

The Walt Disney Company confirmed last night that is to buy Pixar, the computer-animated film studio responsible for hits such as Toy Story and A Bugs Life, in a stock deal worth $7.4bn.

The transaction will give the chief executive of Pixar, Steve Jobs - also the founder and head of Apple Computer - a stunning boost in his personal net value. He will also become the largest individual shareholder in Disney and take a seat on its board.

The price Disney is paying for Pixar is even higher than many on Wall Street had expected. The deal values Pixar at $59.78 per share, a 3.8 per cent premium over its closing price yesterday of $57.57. The paper gain in wealth for Mr Jobs, as the majority holder of Pixar shares, is thus more than $3.7bn.

The marriage comes after two years of squabbling between the two companies that have been in partnership since Toy Story 10 years ago. Disney provided half the financing for Pixar films - there have been six to date - and provides its considerable distribution and marketing heft.

However, the relationship between the two companies was due to expire in June when Pixar is set to release its seventh film, the heavily anticipated Cars. Since taking over as CEO at Disney in October from Michael Eisner, Robert Iger had made repairing ties with Pixar a top priority. Contacts between Mr Eisner and Mr Jobs had become particularly testy.

For Disney, the hope will be that Pixar's presence in its family, which also includes theme parks and ABC television, will rejuvenate its storied, but none the less sagging, animation division. Under the deal, John Lasseter, the principal creative force at Pixar, will take the role of chief creative officer in Disney.

The deal closes Pixar's remarkable run as arguably one of the most successful private company's in American history. Previously owned by George Lucas, the Star Wars director, it was taken over by Mr Jobs 15 years ago. Its string of six box-office hits since then have grossed more than $3.2bn. They also include Finding Nemo and Monsters Inc.

"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," Mr Jobs said in a statement. Some observers worried, however, that Pixar's creative flair could be stunted as the company joins the sprawling Disney empire.

Rumoured for several days, the deal was approved by Disney's board and by Pixar's late yesterday.

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