Table of Contents Disney – Pixar Merger 3Introduction 3Aggressive cost cutting 3Co-production agreement 4Financials 5The investment decision 5How this merger worked in the long term 7Advantages 8Disadvantages 8Bibliography 10Appendix 11Exhibit 1 11Exhibit 2 12Exhibit 2a 13Exhibit 3 14Exhibit 4 and 4a 15Exhibit 8 16Exhibit 9 17Exhibit 11 18Disney – Pixar MergerIntroductionThe Walt Disney Company was created by brothers Walt and Roy Disney on October 16, 1923 and is one of the largest companies in entertainment and media in the world. It is the largest of a number of television networks such as American Broadcasting Company as well as 7 theme parks. Also in the 1930s, Disney began making films with its very first animation; being Snow White and the Seven Dwarfs. Their other main films include Bambi, Dumbo and Pinocchio, all of which were considered children's fairy tales. Additionally, before 2006, Walt Disney had created some of the best cartoons in the industry that generated a lot of revenue for the company, such as The Lion King, Beauty and the Beast, and The Little Mermaid. After The Lion King in 1994, Disney-produced animated films fell below expectations (Table 1). Disney employed 275 employees in 1988 and later increased this to 950 in 1994 due to the release of The Lion King. It later expanded to 2,200 in 1999. Competition for animators in the 1990s also led to an increase in salaries, which accounted for 80% of the cost of each film, with animator salaries increasing from $125,000 in 1994 to $550,000 in 1999. Such wage increases affected the entire industry.Aggressive Cost CuttingThe first film made in a new cost-cutting environment was Lilo & Stitch. The functionality-...... middle of paper ...... Acquire?. Available: http://www.nomics.neu.edu/dana/strat6200/Strategy_6200/14_-_Disney_files/Disney%20and%20Pixar%20-%20Clean%20-%20709462-PDF-ENG-3.pdf. Last accessed 04/08/2014. Kaitlyn Alvino. (2013). Disney-Pixar merger. Available: http://prezi.com/vgdyprhbfveb/disney-pixar-merger/. Last accessed 04/08/2014. Pankaj Baid. (2012). Disney and Pixar. Available: http://www.slideshare.net/pankajbaid17/disney-pixar-14616932. Last accessed 04/08/2014. Rajesh Rikame. (n / A). Case study of Disney and Pixar. Available: http://www.scribd.com/doc/56711406/Case-Study-of-Disney-Pixar. Last accessed 04/08/2014. The Big Cartoon Database. Available: http://www.bcdb.com/cartoons/Other_Studios/C/Cambria_Productions/. Last consulted on 04/08/2014.AnnexExhibition 1Exhibition 2Exhibition 2aExhibition 3Exhibition 4 and 4aExhibition 8Exhibition 9Exhibition 11