Disney Acuired Pixar
Which is greater: the value of Pixar and Disney in an exclusive relationship, or the sumof the value that each could create if they operated independently of one another or wereallowed to form relationships with other companies? Why?
Walt Disney Studios announced that it would acquire Pixar in a stock deal worth $7.4billion on January 24, 2006 and agreed to convert every share of Pixar into 2.3 share of Disney.
Therefore, this deal did not dilute the existing Pixar’s shareholders interest and wealth and SteveJobs turned out to be Disney’s largest shareholder. The value of synergy is greater when Pixarand Disney form an exclusive relationship because it benefits to both parties. For example, afterthe merger, both of them could maintain their two separated animation facilities which mean thatthey can keep their employees. Also, Pixar which is very good at producing computer animatedfeatured movie will keep working on its core competency while Disney would be responsible forthe marketing and distribution.Even though Disney
Pixar was the largest player in the movie industry in terms of producing computer animation movie. Acquisitions are known as source of technology, knowledge, market shares and other
Those companies have differentmanagement styles, different culture, organization matrix, decision making process and ect.
s are related to integration of the companies, creation of newvision and objectives, new management team who will be leader toward adaptation of newobjectives and integration of new company culture.4. Disney issued 279 million new shares in order to do the transaction. However, inorder not to dilute the excising shareholders, Disney bought back 225 million shares in themarket.
So the actual impact on the balance sheet of Disney could be seen as paid in cash for80% of the deal, and sharing the remaining 20% of the capital with Pixar shareholders(assuming that the existing shareholders did not sell their shares during the buyback).
Walt Disney Studios announced that it would acquire Pixar in a stock deal worth $7.4billion on January 24, 2006 and agreed to convert every share of Pixar into 2.3 share of Disney.
Therefore, this deal did not dilute the existing Pixar’s shareholders interest and wealth and SteveJobs turned out to be Disney’s largest shareholder. The value of synergy is greater when Pixarand Disney form an exclusive relationship because it benefits to both parties. For example, afterthe merger, both of them could maintain their two separated animation facilities which mean thatthey can keep their employees. Also, Pixar which is very good at producing computer animatedfeatured movie will keep working on its core competency while Disney would be responsible forthe marketing and distribution.Even though Disney
Pixar was the largest player in the movie industry in terms of producing computer animation movie. Acquisitions are known as source of technology, knowledge, market shares and other
Those companies have differentmanagement styles, different culture, organization matrix, decision making process and ect.
s are related to integration of the companies, creation of newvision and objectives, new management team who will be leader toward adaptation of newobjectives and integration of new company culture.4. Disney issued 279 million new shares in order to do the transaction. However, inorder not to dilute the excising shareholders, Disney bought back 225 million shares in themarket.
So the actual impact on the balance sheet of Disney could be seen as paid in cash for80% of the deal, and sharing the remaining 20% of the capital with Pixar shareholders(assuming that the existing shareholders did not sell their shares during the buyback).