Disney is a worldwide entertainment company; the CEO of Walt Disney Company, Robert Iger, has expressed interest in acquiring Pixar Inc. At the same time, Pixar is the most famous animation studio in the world. The two companies had worked together before and attained great success. In 1991, they had a three-picture deal that resulted in the toy story’s production later on in 1995. The two companies also had a co-production deal in 1995. This acquisition would benefit both companies as Disney would acquire creative human talent in animation, and Pixar would have access to Disney’s distribution rights.
If Walt Disney Company succeeds in the acquisition, Pixar will be a subsidiary of Disney. The rightful CEO of the merger would be Robert Iger as he is the head of the acquiring company. The vertical merger would operate more smoothly if managers from both sides were maintained to head their specific employees. This would ensure the creative cultures of Pixar that have to lead to its ultimate success are maintained even as an entity in Disney. Pixar should also maintain its brand name, and the two companies should both focus on their areas of specialization to ensure the merger’s success. They should combine their prowess in the production of quality animated movies with good storylines.
Some analysts believe that the acquisition of Pixar by Disney would be too expensive for them. This would mean that acquiring company would have to pay an enterprise value of between 6.5billion and 7.4 billion to acquire Pixar. However, there is also an argument that Pixar’s creative talents in animation would earn the fee back to Disney. Some analysts are also raising the question of whether the cultures from the two companies would be able to integrate as they are very diverse. Disney risks losing its culture due to the new technologies that will come with Pixar. Its employees may also lose morale due to the mix-up in technologies. If the merger occurs, Disney should maintain all the employee’s benefits to encourage them to keep working hard. The creation of trust between these competitor companies may also be a challenge as both will want to be at the top.
The corporate culture of the two companies is different. Pixar is all about creativity and focuses on the output of individual employees. They focus on quality output rather than profits. Pixar has the best animators and provides an excellent learning and creative environment for them. When hiring, Pixar managers go for employees who can change the company rather than those who would just fit in. Disney is more about the community mindset and emphasizes storytelling skills to produce movies with excellent storylines. As such, animators from both companies may have difficulties working under managers from the other company.
Pixar might be successful as a part of Disney if certain cards are played right. The company should ensure its creative and productive culture is maintained and continue focusing on animation. This is because animated movies generate the highest returns in the movie industry. Another strategy that may lead to the success of Pixar within Disney is if Disney takes up the distribution of Pixar movies. A shared mission would also encourage the success of Pixar as it would lead to cooperation and trust between the companies by utilizing merged strength.