Change and Mergers Acquisitions

Linda Leimane, Renāte Gasiņa

November 10, 2013

Introduction

• A business change - a process in which a large company or organization changes its working methods or aims, for example in order to develop and deal with new situations or markets• A takeover/acquisition - a situation in which

a company gets control of another company by buying enough of its shares• A merger - an occasion when two or more companies join together• A joint venture -a business or business activity that two or

more people or companies work on together:

Acquisition of Pixar by Disney

The Walt Disney Company

• October 16th, 1923 by brothers Walt and Roy Disney• One of the largest media and entertainment media corporations• Owner of 11 theme parks, several television networks• Started making films 1930• Adaptions of children’s fairytales

The pixar• 1979 founded as Graphics Group• 1986 established as independent company- PIXAR• Emeryville, California, United States• Founders- Ed Catmull, Alvy Ray Smith, Steve Jobs• Computer animation film studio for over 25 years

Reasons for takeover

• Ownership of world’s famoust animation studio and its talent• Own’s animation movies were

failing• Steve Jobs (the deal brought technology

company Apple closer to Disney)

• Decrease in competition

• Good move to face competitiors (Dream Works & 21th century)• The deal gave Apple iTunes more

video content to offer• Can focus on it’s work• As part of the deal to ensure

that Pixar remained a separate entity

Takeover

• Walt Disney buys Pixar• Date: Jan. 23, 2006• Deal worth $7.4 billion (acquisition price calculated using “net present value” across its

businesses)

• Strict contract rules

Advantages

•Can collaborate without the barriers that come from two different companies with two different sets of shareholders

•Can focus on what is most important

• The addition of Pixar significantly enhances Disney animation

•Benefit in theme parks, consumer products and cable • There will be a steering committee that will oversee

animation for both Disney and Pixar studios, with a mission to maintain and spread the Pixar culture.

For employees and for products or services • Studio would remain in its

current Emeryville, California location with the Pixar sign

• Better quality• Bigger demand• More consumers

For customers For shareholders• Expansion – new studios,

expansion on TV• Exhibitons• Better quality• Upper prices

• Pixar's primary directors and creative executives must also join the combined company• Pixar HR policies will remain

intact, including the lack of employment contracts• If Pixar pulls ot of the deal, they

must pay Disney penalty US 210 million dollars

Disadvantages

• High-price deals may also disappoint investors in the long term• produces morally questionable products

Why are staff resisting the change?

• The difficulty of uniting two different cultures• The risk of being fired for some staff• members

What possible mistakes might new management make?

• Failing to Define Goals• Lack of Feedback• Being to friendly

What practical actions can be taken to improve the situation?

• Learn how to provide regular feedback• Set smart goals• Make sure everyone knows their role on the team

What can be learned from this experience?• We can learn that there are always

pros and cons in marketing.• How works film companies and what is

plus and minuses for them.

Sources

• http://dealbook.nytimes.com/2013/08/05/disney-magic-may-not-have-worked-on-pixar/?_r=0• http://

www.complex.com/tech/2013/01/the-15-most-important-tech-acquisitions-of-all-time/disney-buys-pixar• http://disney.wikia.com/wiki/Pixar

Thank you for your attention!

Questions?