Disney to buy Pixar Animation for $7.4 billion US

Walt Disney Co. is buying Pixar Animation Studios, the creator of Toy Story, Finding Nemo and The Incredibles, for $7.4 billion US.

Disney said the all-stock deal for Pixar is expected to be completed by the summer. Disney will issue 2.3 of its shares for each Pixar share.

Steve Jobs, Pixar's chairman and CEO, will get a seat on Disney's board of directors.

"The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses," said Robert Iger, Disney's president and CEO.

Pixar president Ed Catmull will become president of the new Pixar and Disney animation studios.

Disney and Pixar began working together in 1991, leading to the 1995 release of the blockbuster Toy Story. Pixar is currently in production on Cars, the final film under the companies' agreement. The movie will be distributed by Disney on June 9.

Rumours of a takeover of Pixar by Disney pushed the Pixar share price last week to a one-year high of $60 US. On Tuesday, the stock closed at $57.57 US, down 80 cents on the day while Disney shares closed up 47 cents at $25.99.