And they said it wouldn't last

The unlikely deal two years ago that brought together Disney and Pixar is proving to be a successful financial match, according to a lengthy analysis by TheDeal.com. You might recall that Wall Street's initial reaction was less than encouraging, with concerns about the $7.4 billion purchase price (and a cash-flow multiple greater than 27), as well as whether Pixar CEO Steve Jobs would let Mouse House CEO Robert Iger run the show. Also don't forget that Iger was making overtures in the wake of Jobs' sour relationship with outgoing CEO Michael Eisner.

In September 2005, a few weeks before becoming CEO of Walt Disney Co., Bob Iger had a legacy-defining epiphany. It came during the opening ceremonies for Hong Kong Disneyland, a festival featuring everyone from Zeng Qinghong, vice president of the People's Republic of China, to the 100-voice strong Hong Kong Children's Choir. Most telling to Iger, though, was what the over-the-top opening did not feature. "I realized that there wasn't a character in the parade that had come from a Disney animated film in the last 10 years except for Pixar," Iger would later tell investors at a Bear, Stearns & Co. media conference. "And although it was relatively known to me that we had exploited these characters across multiple businesses and multiple countries over time, it really hit me hard that we had had 10 years of real failure in many respects in the business that I believe was the most vital to us."

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Iger, already instrumental in getting Pixar to reconsider Disney as a distribution partner, used his maiden CEO board meeting to pitch Pixar as a merger partner, too. And nine days later, he began making the same pitch to Jobs, owner of 40% of publicly traded Pixar's common stock. From there, Iger went to Jobs' management team, getting such key players as president Ed Catmull and creative executive vice president John Lasseter to buy into what the proxy calls "strategies for preserving the processes and culture developed at Pixar." In addition, with the world at large under the impression relations between Disney and Pixar remained acrimonious, Iger instilled a sense of urgency in his own board. As he put it at the Bear Stearns conference: "I didn't really feel that we could afford taking a lot of time. And Pixar loomed large in that regard because I felt that buying them could turn Disney Animation around immediately in a lot of different ways."