With Disney and Pixar having enjoyed a successful and longstanding distribution partnership, it's no surprise that buying Pixar was option No. 1. But the single best reason for Disney to buy Pixar is that the latter is the king of today's animated film world. Since releasing "Toy Story" a decade ago, Pixar has created one mega-hit after another. Its titles include, "A Bug's Life," "Monster's Inc.," "Toy Story 2," "Finding Nemo" and "The Incredibles."
There are few more reasons why Disney wanted to buy Pixar.
1) It will be able to continue merchandising all the characters of Pixar animations. 2) From a Disney shareholder perspective, the possibility of having Steve Jobs as a top shareholder and active board member was very exciting. His success at Pixar with the turnaround of Apple, Jobs has done a great job of visualizing and then realizing how technology would transform entertainment. 3) Apple's iPod and iTunes already dominate the digital music market, Job's understands the potential, and while a major player in movie creation and traditional movie distribution, Disney could also emerge as the primary beneficiary of online distribution.
At roughly 20 times sales, Pixar wasn't a bargain. But with huge cash reserves...