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Copy of Disney-Pixar Merger

Negotiation Class Presentation
by

Adela Bla

on 22 May 2013

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Transcript of Copy of Disney-Pixar Merger

The Merger Background The Parties Pre-Negotiation Interests & Expectations History The Process Post-Negotiation SO WHAT?? The first projects to begin development entirely after the merger were box-office-safe sequels Toy Story and Cars.
Recent box-office successes: Ratatouille, WALL-E, UP!


Then came Brave...Pixar's first project with a female protagonist and its first directed by a woman.
Brenda Chapman - initial director - replaced by Mark Andrews.
Pixar had once prided itself on its ability to nurture top talent, and now seemed both a place that shut down creativity and was unwilling to nurture voices outside of male directors and executives.
There is still hope! Wreck-It-Ralph zoomed viewers into a curious new world that animators invented from scratch.
Overall, while Disney has picked up Pixar's creative energy, Pixar has suffered from fusing with a more traditional studio.
Pixar's decisions are safer, its voice less unique. Kaitlyn Alvino The Walt Disney Company
Pixar Animation Studios Inc. The Details Negotiating Disney's acquisition of Pixar Studios.
Disney's traditional hand-drawn animation business declining.
Disney's prior arrangement with Pixar coming to a close.
This merger did not come easy. Power of the Parties The Deal The Outcome Who won? Disney Pixar Unparalleled portfolio in world-class family entertainment with characters, theme parks and other franchises.
Pixar had creative and technological resources that Disney lacked.
Needed to revive their studio animation that had once been hand-drawn. Wanted exposure to theme parks, characters, etc. in order to increase profits and propel brand image.
Main interest was to protect their "creative culture."
(Health Benefits, Pixar's front gate, employment contracts.) Pixar had more bargaining power while the deal was being negotiated.
Disney needed Pixar more than Pixar needed Disney.
Pixar acquisition was a strategic "must" for Disney. The Outcome...on Paper Exceeded Expectations Pixar was surprised that Disney followed through and stayed true to all of their promises.
Disney took the motivation and loyalty of Pixar employees fully into account during the negotiation to avoid having employees leave due to the merger. The time to complete the deal was limited.
Disney acquire Pixar vs. Competitor acquire Pixar
Steve Jobs was Pixar's majority shareholder.
Deal agreed on January 24, 2006 - pending shareholder approval.
On May 5th the shareholders of Pixar agreed on selling the company to Disney.
As any other major merger, the deal had to be approved by regulation.
Three investment banks helped create this deal - Credit Suisse, Bear Stearns, & Goldman Sachs Disney agreed to convert every share of Pixar into 2.3 shares of Disney, so that it was a 100% equity transaction.
Disney issued 279 million new shares.
Disney acquired Pixar for $7.4 billion - with Pixar having $1.1 billion in cash and cash equivalents.
Steve Jobs was given 7% stake in Disney - became the largest sole holder of Disney stock.
Pixar's top creative executive, John Lasseter, given a key role in advising Disney in creative matters.
Disney appointed Ed Catmull (president of Pixar) as president of both Disney and Pixar animation studios.
References Pixar remained a separate entity.
Pixar named remained as it had previously been.
The entire merge branding "Disney-Pixar" officially began with their movie Cars.
Disney acquired core strengths of Pixar in producing computer motion pictures.
Disney decreased strength of competitors.
Pixar able to continue computer animation without having to invest in production line for making merchandise and home entertainment.
Pixar able to produce other lines such as apparel, toys, etc.

On paper, it would appear that Disney and Pixar are both winners.
Disney was able to revive their studio animation and was given ownership of the world's most famous computer animation studio and its talent.
Pixar was given access to all of Disney's resources, which was a good move to face their competitors such as DreamWorks and 20th Century Fox.
Disney would finance and distribute Pixar's films.
Mutual trust and respect for both companies developed out of a previously strained relationship.
In most acquisitions, it seems that the conqueror typically reigns supreme. But Disney, despite its legendary corporate history and strong will, held back.
Overall, it seems that both companies were able to maintain and stay true to their original identities. How has this worked in the long run? Questions? Pixar, co-founded by Steve Jobs, left, and Disney, run by Robert A. Iger. Before the merger there was complete success!! "Case Study: Disney Buys Pixar." N.p., 22 Sept. 2009. Web. 05 Feb. 2013. <http://understandingmanda.wordpress.com/article/case-study-disney-buys-pixar-2y7l67l8la2ns-21/>.
"Disney's Acquisition of Pixar." Case Studies. N.p., 2006. Web. 05 Feb. 2013. <http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy/Business%20Strategy%20Disney's%20Acquisition%20of%20Pixar.htm>.
"Disney and Pixar." N.p., 2009. Web. 05 Feb. 2013. <http://www.slideshare.net/pankajbaid17/disney-pixar-14616932>.
"Disney Buying Pixar for $7.4 Billion." Msnbc.com. N.p., 25 Jan. 2006. Web. 05 Feb. 2013. <http://www.nbcnews.com/id/11003466/ns/business-us_business/t/disney-buying-pixar-billion/>.
"Disney Completes Pixar Acquisition." Home. N.p., 5 May 2006. Web. 05 Feb. 2013. <http://thewaltdisneycompany.com/disney-news/press-releases/2006/05/disney-completes-pixar-acquisition>.
Fonda, Daren. "Who Gains from a Pixar-Disney Merger?" N.p., 19 Jan. 2006. Web. 5 Feb. 2013.<http://www.time.com/time/business/article/0,8599,1150674,00.html>.
Grover, Ronald. "Disney-Pixar: It's a Wrap." N.p., 23 Jan. 2006. Web. 5 Feb. 2013. <http://www.businessweek.com/stories/2006-01-23/disney-pixar-its-a-wrap>.
La Monica, Paul R. "Disney Buys Pixar." CNNMoney. Cable News Network, 25 Jan. 2006. Web. 05 Feb. 2013. <http://money.cnn.com/2006/01/24/news/companies/disney_pixar_deal/>.
Ogg, Jon C. "The Disney & Pixar Merger: When a Kiss Becomes a Marriage." 24/7 Wall St. N.p., 24 Jan. 2006. Web. 05 Feb. 2013. <http://247wallst.blogspot.com/2006/05/disney-pixar-merger-when-kiss-becomes.html>.
Schein, Amy. "The Walt Disney Company." Hoovers Online. N.p., 2013. Web. 05 Feb. 2013.<http://subscriber.hoovers.com/H/company360/fulldescription.html?companyId=11603000000000>.
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