Pixar Merger Case Study

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History of the Merger

Walt Disney Company had been working with animation partner, Pixar since 1991 for production and distribution of animated films. In May 1991, Disney entered into an agreement with Pixar for developing and producing three computer animated feature films. According to the agreement, Disney agreed to produce movies to be developed and directed by Pixar's John Lasseter. Disney agreed to market and distribute these movies. Pixar was to be compensated based on the revenue obtained from distributing these films and related products. Including distribution fees, Disney was to get 87% of the distribution proceeds. The first film they released together was Toy Story which was released in November 1995. The film was a hugely successful
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In the US$ 7.4 billion deal, Disney got a library of six Pixar films. Through the merger, Disney would own the world's foremost computer animation studio and its enormous talent pool, while Pixar would have access to Disney's extensive marketing abilities. Disney's press release said, "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…show more content…
Rather than confessing and accepting his mistake, Eisner denied the accusation in spite of it having been recorded in the transcripts. This soured the relationship between Disney and Pixar which could have lead to a serious loss of talent on Disney's part. Iger made appropriate amends and recovered the trust, which helped ensure that the acquisition went through.
3) Talent drives success, not technology: Although technology was a huge contributor to the performance of Pixar, it would be nothing without its talented animators. Ensuring that the HR strategies in place benefit the talent that makes up the company is essential while going through with the merger.
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