The US Justice Department approved Disney’s proposed acquisition of most of 21 Century Fox’s assets for $71.3 billion which include more than 22 local sports channels.
Disney had been struggling to outbid Comcast which had offered $65 billion in cash on 13th June, 2018 which was way over Disney’s first offer of $52.4 billion in stock. Comcast can try to outbid Disney again but it might have a few issues getting approval from its shareholders and the Department of Justice.
Walt Disney and 21st Century Fox reached a new merger agreement with Fox’s leadership and it was approved by both their board after they rejected Comcast’s offer. In the new agreement, Disney offers $35.7 billion in cash the remaining balance is in stock.
When you hear Walt Disney, you might immediately picture a dancing doll called Tinkerbell in a ballerina or some other animation filled with musical interludes (by the way why do we hate Indian movies for singing in the middle of movies and yet not Disney?) or maybe the more popular Marvel movies like Black Panther with all its black pride, Avengers, Thor and others filled with humour and action plus millions of box office money.
Many don’t know much about the Disney that owns 80% of ESPN, ABC, Lucas Films (Star Wars anyone?) and others; whereas Comcast owns NBC Universal, Universal Pictures and has 30% stake in Hulu, the streaming network just like Disney does.
Why Disney so Eager to Own Fox
Fox owns 22 local sports channels like Prime Ticket, Sports West in Los Angeles and shows games like the New York Yankees, Clippers, Kings and Angels; channels like FX and National Geographic, a stake in Hulu and so many important international TV assets in Europe such as 39% in Sky, Star in India and others in Latin America.
Disney won’t take advantage of some of the sports benefits from the channels though since part of the agreement for approving the purchasing involved them divesting some of the local sports channels which Disney agreed to since they were not its main focus.
You can now see why Disney CEO, Bob Iger was so cosy with Rupert Murdoch to etch this deal; it would give Disney access to a lot of TV and movie assets as well as improve its distribution internationally.
If Disney goes through with this deal, it will be the largest stakeholder in the online streaming platform Hulu at 60% and Warner Bros will have 10%; giving it better reign and turf to stretch with Netflix, Amazon and Google.
Combined, Disney and Fox control at least 40% of the American movie box office way more than Universal Pictures, Sony Pictures Entertainment and Paramount Pictures.
This acquisition comes a few weeks after AT&T won over the government in an Antitrust case to acquire Time Warner on 14th June, 2018.
Fox will not be selling its major assets like Fox News, Fox Broadcasting Company and Fox Business Network. It will shift them into a new company before Disney buys 21st Century Fox.
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