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Aman (19/064)
Dharmanshu
(19/076) Rishi
Tarkesh
(19/313)
Shubham
(19/346) Suraj
Ally or Acquire ?
Disney should acquire Pixar according to Dyre, Kale and Harbir framework
ptions
for
PIXAR
and
Disney
Renegotiate deal with
PIXAR Disney
Disney
Combined
Entity
VabVa + Vb
Co production
agreement continues
Acquired by
Disney
Contract negotiated
for distribution only
From Pixars point of view, the firm should renegotiate the contract for
distribution only with Disney or some other Company
Calculations
Pixar
46
167.39
Walt Disney
17
2533
18.80
2700.39
Combined
Combined P/E is greater than the Disneys P/E. So Its EPS would fall post merger(Short
Term).
Dilutiveacquisitionsdecreaseshareholder valueand should thus be avoided, unless the
strategic value of the acquisition is expected to cause a sufficient increase in EPS in later
years.
Since CAGR of Pixar is 23% and CAGR of Disney is 18.1%, EPS of the combined entity will
increase in the later years.
Thus owing to the strategic nature of the acquisition, Disney should acquire Pixar.
Challenges
Thank You