Steve Jobs, Apple founder and CEO is to become one of the most powerful men in Hollywood following Walt Disney's agreement to buy Pixar, the company behind animated hits such as Toy Story and Monsters Inc for $7.4bn.

In a statement on Pixar's website the company said: “Under terms of the agreement, 2.3 Disney shares will be issued for each Pixar share. Based on Pixar's fully diluted shares outstanding, the transaction value is $7.4 billion ($6.3 billion net of Pixar's cash of just over $1 billion)”.

The all-share deal will see Pixar chief executive Steve Jobs join Disney's board of directors.

"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders", said Jobs. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world."

Mr Jobs, who is also the boss of Apple Computer, controls more than half of Pixar's stock and its expected to have a strong voice on the board.

With the ink probably not even dry on the deal, the Apple iTunes store in America has already added certain Disney Short films to its video catalogue.

The shorts will cost $1.99 and amongst the offerings you can find The Three Little Pigs, The Ugly Duckling, and Ferdinand the Bull. There are currently 10 available on the iTMS.

Disney first entered into a feature film agreement with Pixar in 1991, resulting in the release of Toy Story in November 1995.