The merger between Disney and Pixar was more specifically known as a vertical merger. A vertical merger is when two or more firms, operating at different levels within an industry’s supply chain merge operations [1]. In the case of Disney and …show more content…
It is thought that Disney’s choice to close down their hand drawn animations is what led to this decline. Due to Disney’s decline, in 2005, Michael Eisner resigned as Disney’s CEO and Bob Iger was hired. Bob Iger immediately began his reign by mending Disney’s relationship with Pixar and bringing back hand drawn animations. Iger convinced Disney that acquiring Pixar would be in the best interest of the company and the agreement would be mutually beneficial for both companies. At this time, Pixar was experiencing substantial growth (22% CAGR) [6] and their shares had increased 26% in only a couple months in 2005 [6], Pixar also understood the need for a dominant distributor in order to continue their success. Due to Iger’s emergence as Disney’s CEO, both Pixar and Disney resumed talks about a new deal. The new deal was an all-stock deal worth $7.4 billion where Disney acquired