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Breaking News: Disney to acquire Pixar for $7.4B

The Walt Disney Co. said Tuesday it has agreed to buy longtime partner Pixar Animation Studios Inc. for $7.4 billion in a deal that could restore Disney's dominance in animation while vaulting Pixar CEO Steve Jobs into a powerful role at the media conglomerate.

Disney will buy the maker of the blockbuster films "Toy Story," "Finding Nemo," and "The Incredibles" in an all-stock transaction that makes Jobs Disney's largest shareholder, the Associated Press reports.

Jobs, who controls more than half of Pixar's stock and also heads Apple Computer Inc., will also join Disney's board.

Disney has co-financed and distributed Pixar's animated films for the past 12 years, with the two companies splitting the profits. However, that deal was set to expires in June after Pixar delivers its next feature animated film "Cars."

Disney and Pixar had been talking for months about a new relationship, with recent rumors suggesting Disney would offer a $7B bid for the Emeryville, Calif.-based animation studio.

Along with the acquisition, Pixar Executive Vice President John Lasseter will be become chief creative officer of Disney's animation studios and principal creative adviser at Walt Disney Imagineering, which designs and builds the company's theme parks.

Pixar President Ed Catmull will reportedly serve as president of the new combined Pixar and Disney animation studios, reporting to Disney chief executive Robert Iger and Dick Cook, chairman of The Walt Disney Studios.