Mergers, Acquisitions, Alliances and Synergies Case Study

Case Title:

Disney & Pixar: On the Road to Merge

Abstract:
In January 2006, various Wall Street analysts speculated that Disney, one of the largest motion picture studios in the world, was planning to acquire Pixar Animation Studios, the producer of hit animation movies, such as Toy Story, Finding Nemo, The Incredibles, etc. With its traditional hand-drawn animation business declining, Disney was looking for ways to preserve its animation business. The company had an agreement with Pixar to distribute and market animation movies produced by the latter which was scheduled to end in June 2006. As the agreement came closer to an end, Disney considered various options, including a takeover, a stake in Pixar or an extended agreement. While the first option was most likely, analysts debated whether the two should merge or not. The case study outlines a brief history of the animation industry as well as the evolution of the computer animation. It also attempts to give a short description of both the companies. Finally, it tries to give a brief account of the present situation and how a takeover would affect both the companies.

Pedagogical Objectives:

• To discuss the pros and cons of a possible merger between Disney and Pixar
• To get a brief idea of the history of animation
• To understand the emergence of computer animation
• To get a detailed account of the two companies – Walt Disney Company and Pixar Animation Studios.

Keywords : Mergers,Acquisitions,Alliances Case Study;Walt Disney; Pixar; Animation; Computer graphics; Hand-drawn animation; Cartoon; CGI (computer generated imagery); Dreamworks; Touchstone Pictures; Disneyland; Toy Story; Steve Jobs; Apple Computer; Warner Bros; Renderman