In January 2006, I joined Steve Jobs in Emeryville, California, to announce Disney’s acquisition of Pixar, the acclaimed animation studio chaired by Steve. I had become CEO of Disney just three months prior, and the deal represented an enormous opportunity—and risk—for the company and me personally. The plan that day was to release the announcement after the stock market closed at 1 p.m. PT, then hold a press conference and a town hall meeting with Pixar’s employees.

Just after noon, Steve pulled me aside. “Let’s take a walk,” he said. I knew Steve liked to go on long walks, frequently with friends or colleagues, but I was surprised at the timing and suspicious about his request. I wondered whether he wanted to back out of the deal or renegotiate its terms.

I looked at my watch. It was 12:15. We walked for a while and then sat on a bench in the middle of Pixar’s beautiful, manicured grounds. Steve put his arm behind me, which was a nice, unexpected gesture. He said, “I’m going to tell you something that only Laurene”—his wife—“and my doctors know.” He asked me for complete confidentiality, and then he told me that his cancer had returned.

“Steve,” I said, “why are you telling me this now?” “I am about to become your biggest shareholder and a member of your board,” he said. “And I think I owe you the right, given this knowledge, to back out of the deal.”

It was 12:30, only 30 minutes before we were to announce. I wasn’t sure how to respond, and I was struggling to process what I’d just been told, which included asking myself whether what I now knew would trigger any disclosure obligations. He wanted complete confidentiality, so it would be impossible to do anything except accept his offer and back away from a deal I wanted badly, and we needed badly. Finally I said, “Steve, in less than 30 minutes we are set to announce a seven-plus billion-dollar deal. What would I tell our board, that I got cold feet?” He told me to blame him. I then asked, “Is there more that I need to know about this? Help me make this decision.”

He told me the cancer was now in his liver and he talked about the odds of beating it. He was going to do whatever it took to be at his son Reed’s high school graduation, he said. When he told me that was four years away, I felt devastated. It was impossible to be having these two conversations—about Steve facing his impending death and about the deal we were supposed to be closing in minutes—at the same time.

I decided to reject his offer. Even if I took him up on it, I wouldn’t have been able to explain why to our board, which not only had approved it, but had endured months of my pleas to do so. It was now 10 minutes before our release was to go out. I had no idea if I was doing the right thing, but I’d quickly calculated that Steve was not material to the deal itself, although he certainly was material to me. We walked in silence back to the atrium. That night I took my wife, Willow Bay, into my confidence. Willow had known Steve for years, since long before I knew him, and instead of toasting what had been a momentous day in my early tenure as CEO, we cried together over the news. No matter what he told me, no matter how resolved he would be in his fight with cancer, we dreaded what was ahead for him.