Disney buys Pixar Animation

Disney announced on Tuesday that it's paying $7.4bn in stock to acquire Pixar Animation Studios -- a deal that puts Apple CEO Steve Jobs on Disney's board of directors.

For the venerable animation giant, the move is a significant bet on Pixar's digital approach as the successor to the pen-and-ink industry popularised by Walt Disney. The purchase is also the latest indication of a tectonic collision between technology and Hollywood.

As part of the deal, two Pixar veterans will head Disney's animation efforts. Ed Catmull was named president of the combined Pixar and Disney Animation Studios, and John Lasseter was named chief creative officer. Pixar will remain in its San Francisco Bay Area headquarters.

"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," Jobs said in a statement. "Now everyone can focus on what is most important: creating innovative stories, characters and films that delight millions of people around the world."

Pixar and Disney have had a long history together, though the recent past has been rocky. Disney has distributed all of Pixar's features, beginning with Toy Story in 1995.

However, talks to extend the deal turned sour, with allegations flying back and forth between Jobs and then Disney CEO Michael Eisner. In January 2004, Pixar announced that it was breaking off talks with Disney and would look elsewhere for a studio partner to release its films.

Things seem to have improved of late, though, as Disney has emerged as a major iTunes partner for Apple, with Jobs and newly installed Disney CEO Robert Iger appearing on stage at last year's launch of the video iPod.