The Disney-Pixar Merger

The end result of the agreement between Disney and Pixar is that Pixar's final income may be as much as 40% of the total profits produced by the movie. By contrast, Disney received a distribution fee of 12.5% ​​of box office income in addition to half of box office revenue and remaining income from other income sources. Overall, the company will receive at least 60% of each movie's profit (see Figure 8). Pixar was released one week after announcing Toy Story in 1995, raising $ 140 million with the largest IPO this year (Chart 10).

The combination of Walt Disney and Pixar has brought a lot of convincing advantages to Disney, but Pixar shareholders should not be very enthusiastic about such a deal. Pixar's resources and abilities set a very difficult standard to imitate. Thanks to excellent talent, originality and collaboration culture, and unique 3D computer animation software, Pixar created a competitive advantage in the animation film industry, and boxing income reached 538 million dollars in only 6 movies . Pixar shareholders should beware of the potential collapse of these resources and abilities, which are essentially their core competitiveness. Through this merger, Pixar may be able to get more dollar signals, but it is more likely to lead the company's resources and abilities to dominate the animation film industry.

Shareholders should recognize that the value of Pixar comes from its human assets and innovative cooperative capacity. Quality is exceeding the quantity. Finally, this merger means the extinguishment of Pixar's shares, and Pixar's dependence on Disney rests entirely on the ability to announce Disney movies. Pixar needs to focus on building a capital alliance with Disney, not a merger of numerous crises with Pixar's valuable soft assets. Pixar makes a movie, Disney has released a movie. This shows that capital tie-up is a more strategic choice based on the framework proposed in the "Merger Timing and Acquisition Time" articles. As more and more people become familiar with computer-generated animation, resource competition will begin to rise