Disney to buy Pixar for $7.4 billion

The Walt Disney Co on Tuesday said it would buy Pixar Animation Studios in a $7.4 billion deal that gives Pixar animators creative control over the world's most famous cartoon studio and make Pixar CEO Steve Jobs Disney's largest individual shareholder.

Under the agreement, expected to close this summer, Jobs, who also heads Apple Computer Inc, will join Disney's board of directors.

Pixar's six films with Disney, including "Toy Story," "Finding Nemo" and "The Incredibles," have grossed more than $3.2 billion.

"As I considered the possibility of returning Disney animation to greatness, it was clear to me that maintaining a relationship with Pixar was essential," Iger told analysts on a conference call on Tuesday.

Pixar has over $1 billion in cash on its balance sheet, making the net value of the transaction about $6.3 billion, Staggs said.

Both boards of directors have approved the deal, which calls for 2.3 Disney shares to be issued for each Pixar share.

Jobs owns a 50.6 percent stake in Pixar shares, which would translate into about 6 percent of Disney shares after the deal. After the deal, Disney shares fell 9 cents to $25.90 and shares of Pixar rose $1.53 or 2.7 percent to $59.10 on Inet following the announcement.