It was announced Friday that the shareholders of Pixar (PIXR) Animation Studios Inc. approved an offer from The Walt Disney (DIS) Co. for $7.4 billion in stock. One thing to keep in mind is that Steve Jobs holds 40% of Pixar's stock and only needed 11% more to approve.
With the purchase Pixar is now a totally owned subsidiary of Disney, and Jobs is now Disney's single largest shareholder with a 7 percent ownership. Pixar shareholders will receive 2.3 shares of Disney for each one of theirs. Regulators had already given the go ahead for the deal.
To me this is a great coup by Disney which has lost a lot of its shine in the animated film business. They have stumbled greatly while Pixar has put out hit after hit.
The deal has transpired only a month before the partnership between Pixar and Disney was going to expire.
Talks began a couple of years ago to extend the agreement, but became bogged down as personal problems between Jobs and former Disney CEO Michael Eisner. After Rober Iger was named as the new Disney CEO, the talks resumed. They great increased as research revealed that families with children under the age of 12 viewed Pixar in a far more favorable light than Disney.
One part of the deal placed major Pixar managers into executive positions at Disney's animation and theme parks.
Iger commented concerning one of the major impacts upon him for the deal was when he was in Hong Kong watching a parade:
"I was at the opening of Hong Kong Disneyland and standing with a few thousand other people watching the parade go by and I realized that there wasn't a character in the parade that had come from a Disney animated film in the last 10 years except for Pixar," Iger said.
"It really hit me hard that we had had 10 years of real failure in many respects in the business that I believe was the most vital to us."
All of these comments do make me think of what Pixar gets out of this deal. They have allowed themselves to be bought out by someone who is now considered less of a brand then they are. I wonder if this was a vanity deal by Jobs rather than a strategic one? What do you think?
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