The Wall Street Journal reported on Thursday that Walt Disney Co. has entered into discussions with Pixar Animation Studios regarding the potential aquisition of Pixar. The newspaper report said the terms under discussion would have Disney pay a small premium to Pixar's current stock market value of $6.7 billion.

The deal would be a stock transaction and would make Pixar's chief executive Steve Jobs the biggest individual shareholder in Disney, the newspaper reported.

The talks are currently at a sensitive stage and other options are possible, including an agreement for Disney to distribute Pixar movies, the report said, citing people familiar with the situation.


The companies have been partners since Pixar began making feature films starting with "Toy Story." Currently Pixar and Disney split costs, and Disney has sequel rights to Pixar films.

Representatives for both Disney and Pixar could not be reached for comment.

Copyright 2006 Reuters