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Mergers and Acquisitions

C/B/500. Master's Dissertation. The motives, benefits and future performance of Disney after the acquisition of Pixar

WORDS:

15000

DATE:

2006

PRICE:

159.99 GBP

On 10th of May 2006 The Walt Disney Company acquired Pixar Animation Studios. The takeover has captivated the world, due to the price of the acquisition ($7.4bn) and the potential outcome of this marriage. Disney has the distribution strength that stems from its brand name as well as a wide range of businesses that the company owns: theme parks, TV stations, musicals, film production companies. Pixar's strength lies within its innovative team that has provided that world with a streak of best selling animation cartoons since 1995. The full list of motives behind this acquisition is a mystery, as well as its future benefits. Academic research shows that there are a large number of motives behind acquisitions, besides economies of scale and a creation of shareholder value. Moreover, a large number of researches agree that acquisitions do not bring positive abnormal returns to acquiring companies. This work will explore the why Disney decided to acquire Pixar despite the risks of the acquisitions being unsuccessful. Moreover, the work will analyse the benefits that this deal could bring to the company. The work will be organised as follows: prior to starting chapter 1, where the aspects of mergers and acquisitions will be described, objectives and methodology for this work will be outlined. Chapter 2 will focus on literature review of theoretical work and empirical evidence in line with the objectives. Chapter 3 will use Disney and Pixar's acquisition as a case study to analyse the motives of the acquisition, and the benefits that are likely to result from it.

KEYWORDS: Dissertation, Walt Disney, Pixar, M&A,