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Old 01-21-2006, 09:04 PM   #1
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PRESS RELEASE PIXAR SALE TO DISNEY

Disney to Acquire Pixar





Burbank, CA and Emeryville, CA (January 24, 2006) – Furthering its strategy of delivering outstanding creative content, Robert A. Iger, President and Chief Executive Officer of The Walt Disney Company (NYSE: DIS), announced today that Disney has agreed to acquire computer animation leader Pixar (NASDAQ: PIXR) in an all-stock transaction, expected to be completed by this summer. Under terms of the agreement, 2.3 Disney shares will be issued for each Pixar share. Based on Pixar's fully diluted shares outstanding, the transaction value is $7.4 billion ($6.3 billion net of Pixar's cash of just over $1 billion).*

This acquisition combines Pixar's preeminent creative and technological resources with Disney's unparalleled portfolio of world-class family entertainment, characters, theme parks and other franchises, resulting in vast potential for new landmark creative output and technological innovation that can fuel future growth across Disney's businesses. Garnering an impressive 20 Academy Awards, Pixar's creative team and global box office success have made it a leader in quality family entertainment through incomparable storytelling abilities, creative vision and innovative technical artistry.

"With this transaction, we welcome and embrace Pixar's unique culture, which for two decades, has fostered some of the most innovative and successful films in history. The talented Pixar team has delivered outstanding animation coupled with compelling stories and enduring characters that have captivated audiences of all ages worldwide and redefined the genre by setting a new standard of excellence," Iger said. "The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses. This investment significantly advances our strategic priorities, which include - first and foremost - delivering high-quality, compelling creative content to consumers, the application of new technology and global expansion to drive long-term shareholder value."

Pixar President Ed Catmull will serve as President of the new Pixar and Disney animation studios, reporting to Iger and Dick Cook, Chairman of The Walt Disney Studios. In addition, Pixar Executive Vice President John Lasseter will be Chief Creative Officer of the animation studios, as well as Principal Creative Advisor at Walt Disney Imagineering, where he will provide his expertise in the design of new attractions for Disney theme parks around the world, reporting directly to Iger. Pixar Chairman and CEO Steve Jobs will be appointed to Disney's Board of Directors as a non-independent member. With the addition of Jobs, 11 of Disney's 14 directors will be independent. Both Disney and Pixar animation units will retain their current operations and locations.

"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," said Jobs. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world."

"Pixar's culture of collaboration and innovation has its roots in Disney Animation. Our story and production processes are derivatives of the Walt Disney 'school' of animated filmmaking," said Dr. Catmull. "Just like the Disney classics, Pixar's films are made for family audiences the world over and, most importantly, for the child in everyone. We can think of nothing better for us than to continue to make great movies with Disney."

The acquisition brings to Disney the talented creative teams behind the tremendously popular original Pixar blockbusters, who will now be involved in the nurturing and future development of these properties, including potential feature animation sequels. Pixar's 20-year unrivaled creative track record includes the hits Toy Story, Toy Story 2, A Bug's Life, Monsters, Inc., Finding Nemo and The Incredibles. Disney will also have increased ability to fully capitalize on Pixar-created characters and franchises on high-growth digital platforms such as video games, broadband and wireless, as well as traditional media outlets, including theme parks, consumer products and live stage plays.

"For many of us at Pixar, it was the magic of Disney that influenced us to pursue our dreams of becoming animators, artists, storytellers and filmmakers," said Lasseter. "For 20 years we have created our films in the manner inspired by Walt Disney and the great Disney animators - great stories and characters in an environment made richer by technical advances. It is exciting to continue in this tradition with Disney, the studio that started it all."

"The wonderfully productive 15-year partnership that exists between Disney and Pixar provides a strong foundation that embodies our collective spirit of creativity and imagination," said Cook. "Under this new, strengthened animation unit, we expect to continue to grow and flourish."

Disney first entered into a feature film agreement with Pixar in 1991, resulting in the release of Toy Story, which was hailed as an instant classic upon its release in November 1995. In 1997, Disney extended its relationship with Pixar by entering into a co-production agreement, under which Pixar agreed to produce on an exclusive basis five original computer-animated feature films for distribution by Disney. Pixar is currently in production on the final film under that agreement, Cars, to be distributed by Disney on June 9.

The Boards of Directors of Disney and Pixar have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antritrust Improvements Act, certain non-United States merger control regulations, and other customary closing conditions. The agreement will require the approval of Pixar's shareholders. Jobs, who owns approximately 50.6% of the outstanding Pixar shares, has agreed to vote a number of shares equal to 40% of the outstanding shares in favor of the transaction.

The Disney Board was advised by Goldman, Sachs & Co. and Bear, Stearns & Co. The Pixar Board was advised by Credit Suisse.

Separately, the Disney Board approved the repurchase of approximately 225 million additional shares, bringing the Company's total available authorization to 400 million shares. Since August 2004 through the end of December 2005, Disney has invested nearly $4 billion to purchase nearly 155 million shares. Disney anticipates further significant share repurchases going forward, reflecting Disney's continued commitment to returning value to shareholders over time.

* Based on Disney's closing share price of $25.52 as of 1/23/06.

About The Walt Disney Company:

The Walt Disney Company (NYSEIS), together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products. Disney is a Dow 30 company, had annual revenues of nearly $32 billion in its most recent fiscal year, and a market capitalization of approximately $50 billion as of January 23, 2006.

Investor Conference Call:

An investor conference call will take place at approximately 2:15 p.m. PT / 5:15 p.m. ET today, January 24, 2006. To listen to the Webcast, turn your browser to www.disney.com/investors/presentations or http://corporate.pixar.com.

If you cannot participate in the live Webcast, re-plays will be available for domestic callers at (888) 286-8010 (PIN 56666399) and for international callers at (617) 801-6888 (PIN 56666399), or at www.disney.com/investors/presentations until 4:00 p.m. PT on Tuesday, February 7, 2006. An .mp3 version of this Webcast replay will also be available approximately 24 hours after the Webcast concludes at www.disney.com/investors/presentations.

Forward-Looking Statements:

Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of the views and assumptions of the management of The Walt Disney Company and Pixar regarding future events and business performance as of the time the statements are made and they do not undertake any obligation to update these statements. Actual results may differ materially from those expressed or implied. Such differences may result from legal or regulatory proceedings or other factors that affect the timing or ability to complete the transactions contemplated herein, actions taken by either of the companies, including restructuring or strategic initiatives (including capital investments or asset acquisitions or dispositions), as well as from developments beyond the companies' control, including: adverse weather conditions or natural disasters; health concerns; international, political or military developments; technological developments; and changes in domestic and global economic conditions, competitive conditions and consumer preferences. Such developments may affect assumptions regarding the operations of the businesses of The Walt Disney Company and Pixar separately or as combined entities including, among other things, the timing of the transaction, the performance of the companies' theatrical and home entertainment releases, expenses of providing medical and pension benefits, and demand for products and performance of some or all company businesses either directly or through their impact on those who distribute our products. Additional factors that may affect results are set forth in the Annual Report on Form 10-K of The Walt Disney Company for the year ended October 1, 2005 under the heading "Item 1A—Risk Factors" and in the Quarterly Report on Form 10-Q of Pixar for the quarter ended October 1, 2005 under the heading "Risk Factors" section of Part I, Item 2.

For Additional Information:

This material is not a substitute for the prospectus/proxy statement Disney and Pixar will file with the Securities and Exchange Commission. Investors are urged to read the prospectus/proxy statement which will contain important information, including detailed risk factors, when it becomes available. The prospectus/proxy statement and other documents which will be filed by Disney and Pixar with the Securities and Exchange Commission will be available free of charge at the SEC's website, www.sec.gov, or by directing a request when such a filing is made to The Walt Disney Company, 500 South Buena Vista Street, Burbank, CA 91521-9722, Attention: Shareholder Services or by directing a request when such a filing is made to Pixar, 1200 Park Avenue, Emeryville, CA 94608.

Pixar, its directors, and certain of its executive officers may be considered participants in the solicitation of proxies in connection with the proposed transactions. Information about the directors and executive officers of Pixar and their ownership of Pixar stock is set forth in the proxy statement for Pixar's 2005 annual meeting of shareholders. Investors may obtain additional information regarding the interests of such participants by reading the prospectus/proxy statement when it becomes available.

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Looks like things are coming to a head :

http://news.com.com/2100-1026_3-6029432.html

"Walt Disney's board of directors is expected to meet by Monday to consider buying Pixar Animation Studios in a deal that could revive Disney as the world's dominant animation studio and give computer pioneer Steve Jobs a new platform of power."
- News.com

What an amazing admission of defeat that would be on Disney's behalf...
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Last edited by RobertoOrtiz : 01-24-2006 at 09:39 PM.
 
Old 01-21-2006, 09:10 PM   #2
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If Disney buys Pixar then I'm quitting my job as an animator and becoming an accountant, because apparently making money is more important than making great films.
 
Old 01-21-2006, 09:34 PM   #3
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Quote:
Originally Posted by brentorama
If Disney buys Pixar then I'm quitting my job as an animator and becoming an accountant, because apparently making money is more important than making great films.


Get ready to hand in your papers then!!

-M
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Old 01-21-2006, 09:47 PM   #4
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Oh please NO!
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Old 01-21-2006, 09:55 PM   #5
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That's right! Evil wins again!!!
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Old 01-21-2006, 09:58 PM   #6
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Making money has always been the first priority in the entertainment business. It's not pretty or even ethical at times, yet it's what's keeping companies from closing their doors.
 
Old 01-21-2006, 10:06 PM   #7
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Quote:
Originally Posted by brentorama
If Disney buys Pixar then I'm quitting my job as an animator and becoming an accountant, because apparently making money is more important than making great films.


So what if they buy them? You think Jobs will just let his 50.8% share in a company that 'successful' doesn't even begin to describe go to the hands of Disney corporate? Lets face it, Pixar knows better than to simply negotiate in a "money talks" scenario. If anything, I can see Pixar letting Disney buy into them a fraction, maintaining complete and utter control of themselves and also striking a new distribution deal. Lets face it, Pixar can play this any way they like, they're in the drivers seat on this one.

On a totally unrelated note... what's with all the paranoia on the boards lately? Did I miss something where Nostradamus leapt from the grave and predicted the doom of the CG Industry?


-s
 
Old 01-21-2006, 10:08 PM   #8
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Eh... if it happens, well then it happens. I really hope it doesn't but I won't be quitting my advances towards working in the industry, nor will I move to France in protest (Johnny, it was just silly).

Disney is a company that has the power and talent to come back to it's former artistic glory, if leadership permits. I'm not convinced that Jobs is the person that can fill that role, but then again I could be wrong.
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Old 01-21-2006, 10:11 PM   #9
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how is disney evil again....

didnt they start that animation shizznit....

now ppl are threatning to go to accounting...

without disney where would animation be...

let me know plz. 'cause i really dont.

are ya'll just trollin' along the "disney is bad for whatever reason" bandwagon...
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Old 01-21-2006, 10:13 PM   #10
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There was an article in the New York times yesterday discussing this. It was mentioned that if Disney buys Pixar, John Lasseter COULD be chosen to run the animation division. Pixar's creative culture would/could be brought down to Disney. Basically the article said Pixar would get the distributing and marketing power of Disney, and Disney could benefit from Pixar's creativity.

So I don't know how bad Disney buying Pixar would be....or see how "apparently making money is more important than making great films." It looks to me like Disney is trying to make money and wants to make great films.

OH, and after reading about Robert Iger, and seeing how he repaired relations with Steve Jobs I think he could be exactly what Disney needs. He looks like he truly cares about quality, and wants to embrace new technology to deliver content.
 
Old 01-21-2006, 10:15 PM   #11
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Quote:
Originally Posted by vladimir_
how is disney evil again....

didnt they start that animation shizznit....

now ppl are threatning to go to accounting...

without disney where would animation be...

let me know plz. 'cause i really dont.

are ya'll just trollin' along the "disney is bad for whatever reason" bandwagon...


Yeap.. but they'll get over it after awhile...in either case, both companies will be successful in the near future.

Hmm...
Walt Disney Feature Animation
Walt Disney Circle7 Animation
Walt Disney Pixar Animation

3 buildings.. all working on CG features..

-M
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Old 01-21-2006, 10:17 PM   #12
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A company when it reaches multinational influence and a controlling interest in over a third of the media can no longer be validated by its achievements in it's infancy. Pixar is on it's way up to the pinnacle of it's own creative capabilities, but inevitably the company will grow to such a point where revenue and corporate strategy outweigh the importance of conveying stories that withstand the test of time; creating wonderful films that last for generations. It was my hope that this process would occur in a natural way, over the course of many decades. Should disney merge with the company it is clear to me that the peak and decline of Pixar will happen much quicker. It's just history, it has happened before. It is hapening now.
 
Old 01-21-2006, 10:19 PM   #13
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umm ok

are we assuming they'll be making bad films when/if disney buy them, or am i the only one without the magic 8Ball?
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Old 01-21-2006, 11:02 PM   #14
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Quote:
Originally Posted by brentorama
A company when it reaches multinational influence and a controlling interest in over a third of the media can no longer be validated by its achievements in it's infancy. Pixar is on it's way up to the pinnacle of it's own creative capabilities, but inevitably the company will grow to such a point where revenue and corporate strategy outweigh the importance of conveying stories that withstand the test of time; creating wonderful films that last for generations. It was my hope that this process would occur in a natural way, over the course of many decades. Should disney merge with the company it is clear to me that the peak and decline of Pixar will happen much quicker. It's just history, it has happened before. It is hapening now.


I don't nearly see this as being a universal truth of any sort to be honest. While individual and company creativity often go through influxes over time and can/will slump now and then, there will always be a continuous drive to fuel the creativity while the proper people are in power. Just because Disney buys into Pixar does not mean that the Creative Directors, Art Directors and writers will all be fired; infact I believe the opposite will happen where these people are kept as a valuable asset just as they have been all along. Pixar has made a name for itself time and time again, it continues to do so and revolutionize the age-old Disney story-telling to a fresh and inspiring point these days; this persists because of the key people at Pixar who have a love and passion for the work, not for the paycheque and being part of the $100,000 club.

In regards to the "peak and decline" statement, Pixar has already peaked; they peaked way back when Toy Story propelled itself into every childs room and when Monsters Inc rocketed forth iconic representations that kids could relate to. Lets face it, Pixar has been at the top of its game for a number of years now because of their ability to stay focussed on the quality and consistency of their art and stories; they're not about to lose that.

Pixar will remain a top dog and will persistently create inpsiring pieces in my eyes, penning a deal with Disney will only solidify that more. You have a very large company with powerful marketing able to sell/promote/ship your product in mass quantities, the ability to globally tap into any and all mediums worldwide from theme parks to mom & pop video stores etc etc. Above all, you now have 2 company execs who are looking to better their companies, Iger wants to see Disney succeed the way Roy Disney probably would have wanted his father to see the company and this is probably why the talks are in place.

To be quite frank, both companies for the lack of a better term 'need' each other (excessive term yes, but I couldn't think of anything better at the moment) and can benefit immensely off what the other has to offer.

Still feel like quitting your job?


-s
 
Old 01-21-2006, 11:10 PM   #15
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Disney needs Pixar more than Pixar needs Disney.

And a job is just a job

Unless it's a Steve Job
 
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