Disney to aquire Pixar -
long-time creative partners form new worldwide leader in quality family
entertainment
Ed
Catmull named President of the combined Pixar and Disney Animation
Studios and John Lasseter named Chief Creative Officer; Steve Jobs to
join Disney's board of directors - Disney increases stock repurchase
authorization
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).*
* Based on
Disney's closing share price of $25.52 as of 1/23/06 [Jan 23, 2006].
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.
About The Walt Disney
Company
The Walt Disney Company (NYSE:DIS), 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
http://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
http://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,
http://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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