Merger and acquisition - Essay Example

Mergers may result into a stronger company with combined assets, competencies or into a dilution of financial strengths of one of the companies. Some of the examples of mergers that made deadlines include the one between British Salt and TATA Chemicals. This article focusses on the Disney and Pixar merger that saw Disney acquiring shares worth $ 7.4 billion in Pixar. This merger was more than a necessity for Disney especially because of Pixar’s creative force. According to Barnes (2008), Pixar was founded as the Graphics Group in 1975 with initial intention of making the first completely digital movie.

Pixar started as a high end computer hardware company and one of their customers were Disney Studios who bought their Pixar Image Computer that never sold well. Due to poor sales, Pixar began animations and in 1990, the company’s hardware division was sold by Steve Jobs although Pixar still maintained her relationship with Walt Disney Feature Animation (Baid, 2012). Pixer then made a $26 million deal with Disney to produce some animated feature films that included Toy Story that went on to gross more than $350 million worldwide in 1995 and later became a major controversy between the two companies.

Pixar became Hollywood’s first fully computer-generated feature film which made it become a household name overnight. All along, there was a close business relationship between Pixer and Disney that saw Disney’s acquisition of Pixer on May 5, 2006 (Baid, 2012). Barnes (2008) explains that Disney has been preeminent in the field of family entertainment that began as a cartoon studio in the 1920s to the current global corporation. The company still provides quality entertainment for many families across the world Disney began with Alice comedies where he created a character named Oswald the Lucky Rabbit before another character known as Mickey Mouse.

Disney began animated feature film in 1934 with the story of