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Disney to acquire Pixar for $7.4 billion in stock

Two beneficiaries: Jobs's status, restored animation luster

LOS ANGELES -- Walt Disney Co. said yesterday it is buying Pixar Animation Studios Inc. for $7.4 billion in stock in a deal that could restore Disney's clout in animation while vaulting Pixar chief executive Steve Jobs into a powerful role at the media conglomerate.

Disney's purchase of the maker of the blockbuster films ''Toy Story" and ''Finding Nemo" would make Jobs Disney's largest shareholder. Jobs, who owns more than half of Pixar's shares and also heads Apple Computer Inc., will join Disney's board.

''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," said Robert Iger, Disney's chief executive.

Disney has cofinanced and distributed Pixar's animated films for 12 years, splitting the profits. But that deal expires in June after Pixar delivers ''Cars" and it had once appeared the companies would not renew it amid friction between Jobs and former Disney CEO Michael Eisner.

But the talks revived under Iger. Disney, the theme park owner that also owns the ABC and ESPN television networks, and Pixar have been talking for months about a new relationship.

John Lasseter, Pixar's executive vice president, will become chief creative officer of the animation studios and principal creative adviser at Walt Disney Imagineering, which designs and builds the company's theme parks.

Ed Catmull, Pixar's president, will serve as president of the combined Pixar and Disney animation studios.

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

Disney said it will issue 2.3 shares for each share of Pixar stock. At yesterday's closing price of $25.99 for Disney, Pixar shareholders would get stock worth $59.78, a 4 percent premium over Pixar's closing price of $57.57. The deal was revealed after markets closed.

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