Rumor: Disney to buy Apple?

Ivan Brusic ivan at
Thu Feb 18 20:15:27 UTC 1999

The URL for this article is at:

One thing that was removed from this article was the following paragraph:
PUBLISHER'S NOTE: Readers and industry executives came forward yesterday
to say that the rumor presented was just that, a rumor. Please heed the
various disclaimers, as the following account has very little factual

More up-to-date info can be found at:


On Thu, 18 Feb 1999, Mark Guzdial wrote:

> If we can discuss Microsoft pushing Smalltalk here, other interesting
> fictions are relevant, too...:-)
> Rumor: Disney to buy Pixar, Apple? Jobs still CEO?
> By AppleInsider Staff (AppleInsider at
> February 16, 1999
> Well, rumors abound, and they never seem to end. Over the past few weeks
> we've been following what would have previously been labeled as highly
> improbable or even "out there," but one source over the last few days has
> provided enough details on this unfolding story to merit our attention. To
> call this anything but a rumor would be naive. The following report is based
> on facts gathered from a single trusted source over the past few weeks.
> Background
> Rumors of an Apple-Disney partnership have circulated the Web for as long as
> we've been publishing, but we have never--until now--received any compelling
> details or evidence to justify printing the buyout rumors here. However,
> this story we've been following may provide the missing link.
> Steve Jobs incorporated Pixar computer animation studios in 1986 and since
> then Pixar has enjoyed tremendous success with its first motion picture
> release, ToyStory, and then with the recently released A Bug's Life. Much of
> its success--financial and otherwise--has been due to its relationship with
> Disney.
> Pixar first parterned with Disney in an agreement in which Disney would
> produce interactive CD titles for Pixar. Soon after, Pixar joined Disney in
> a film partnership that has since shown great success and financial rewards
> for each company. Due to the projected success of A Bug's Life, Disney CEO
> Michael Eisner and Jobs were reportedly in negotiations at one point to
> extend the five-film agreement to eight or ten films, at which point Jobs
> apparently mentioned something about the possibility of a Pixar buyout to
> Eisner.
> That's all she wrote...
> Using the same powers of persuasion that led Apple to buy NeXT, Jobs was
> reportedly able to convince his longtime friend, Eisner, and the rest of
> Disney's Board to consider a buyout of Pixar.
> According to our source, Jobs was able to 'sell Apple' by presenting it as
> the key to developing cutting-edge technology and the computing innovation
> necessary to bring it to the masses--leveraging Apple's strength in
> QuickTime and its growing influence in the consumer space.
> While our source only speculated on the strategic importance of Disney's
> acquisition of Apple, a closer relationship with Pixar would be beneficial
> for future projects. Jobs's leadership and charisma would certainly give
> Disney a unique position in the entertainment industry. Of course, as a
> respected industry visionary, Jobs has more up his sleeve than most could
> even imagine.
> Details, Details, Details
> By the end of the week, and possibly even today, Disney, Apple, and Pixar
> may announce what will amount to be a three-way multibillion dollar,
> multi-company, mega-merger in which Disney would acquire both Pixar and
> Apple.
> The agreement also reportedly calls for both Apple and Pixar to become
> independent divisions within Disney. This would allow Disney to leverage the
> strong Apple brand name in an effort to get technology into the hands of the
> mass market.
> As part of the agreement, Jobs would become CEO of Disney, effective June
> 7th, 1999. Jobs would be charged with leading Disney, the new Pixar-based
> interactive studios division (headed by John Lasseter), and the Apple
> computing/technology division. Michael Eisner, who has been preparing to
> step down as CEO of Disney due to health concerns (originally prompted by a
> heart attack a few years ago), would reportedly remain the Chairman of
> Disney's Board of Directors.
> Money, Stock, Compensation
> According to sources, the deal will be completed in a stock swap worth more
> than $12 billion dollars (at current market estimates), with no cash
> exchanged. Both Apple and Pixar shareholders would receive Disney stock in
> exchange for their current holdings. Although the exact amount may vary with
> current market prices, estimates are that Disney will pay out nearly $7
> billion in stock for Apple. (AAPL is currently valued at 37 11/16 as of
> 02/15).
> Jobs reportedly stands to gain as much as $5 billion in Disney stock-- which
> can be attributed to his significant stake in Pixar. His stake, which
> amounts to more than 60 percent of the company is currently valued at $1.3
> billion. But more importantly, Jobs will be in the ultimate position to
> guide, shape, and create a vision for technology and people around the
> world.
> Where to go from here...
> While more details of the agreement were not immediately available, at least
> two sources have confirmed that Jobs and many members of the Apple Executive
> team have spent much of the past 10 days at Disney's headquarters in
> Burbank, California, working on the details of this landmark agreement.
> It seems clear that Disney has a lot to gain from having Pixar in house,
> particularly given the close relationship between the two. Although the
> specific strategic importance of Apple to Disney is still unclear, Apple's
> leadership in the creative markets and strong brand name in the computer
> industry can surely help Disney achieve its overriding objective "to create
> shareholder value by continuing to be the world's premier entertainment
> company from a creative, strategic, and financial standpoint. "
> The addition of Pixar into the Apple-Disney equation helps put together some
> of the puzzle pieces which have floated around without any logic or
> rationale; and may provide the missing link that would bring Jobs, Apple,
> and Disney together.
> More details Coming "very soon"
> As our source suggested, this is probably closer to reality than any other
> buyout rumor yet circulated and may, in fact, surface in today's editions of
> major mainstream publications.
> With the Disney shareholder meeting quickly approaching (next week, February
> 23rd), Apple's somewhat low-key (and premature), release of its highly
> touted Java Virtual Machine, MRJ 2.1, and Jobs's expected keynote at
> Macworld Expo Tokyo '99 on Wednesday night (Eastern Standard Time), we
> expect details on the emerging deal--confirmation or otherwise-- to surface
> very quickly.
> If true, this would be a momentous turn in the evolution of the computer
> industry, as all three companies will be poised to change the future of
> computing, interactivity, and entertainment using cutting edge Apple
> technology.
> Note the numbers outlined here may vary substantially with market
> conditions, may depend on the day any agreement would be executed, and may
> reflect uncertainties with regards to ongoing negotiations.
> Don't forget to stop by the AppleInsider Web Board to discuss the latest
> insider news and rumors.
> --------------------------
> Mark Guzdial : Georgia Tech : College of Computing : Atlanta, GA 30332-0280
> (404) 894-5618 : Fax (404) 894-0673 : guzdial at


Ivan Brusic                        |  "Computers are nothing but a perfect
Graduate Student                   |   illusion of order" - Iggy Pop
College of Computing & GVU Center  |  
Georgia Institute of Technology    |  E-mail: ivan [at]

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