The Mouse will gobble up Fox.
The Walt Disney Company announced Thursday that it has reached a definitive agreement to acquire 21st Century Fox for $52.4 billion dollars in stock.
Disney chairman Bob Iger was expected to detail the giant deal to the media during a morning conference call, but according to the Hollywood trade publication “Variety,” the massive sale by Rupert Murdoch is “all about” building up Disney’s “direct-to-consumer streaming capabilities.”
“Disney needs to enhance its ability to reach consumers directly with programming and channels to guard against further declines in the current pay TV eco-system,” the publication explained of the deal.
Disney will apparently spin off some Fox businesses once the deal closes.
However, Variety warned that the agreement may come under close review by the federal government concerned about anti-trust issues.
The transaction will include 21st Century Fox’s film and television studios, cable entertainment networks and international television businesses.
Disney, often referred to as the “mouse” due to the success of its first animated star, Mickey Mouse, will also acquire such entertainment properties as X-Men, Avatar, The Simpsons, the FX Networks and National Geographic.
Immediately prior to the acquisition, 21st Century Fox will assemble the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders.
“The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before,” said Robert A. Iger, Disney chairman and chief executive officer.
“We’re honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building, and we’re excited about this extraordinary opportunity to significantly increase our portfolio of well- loved franchises and branded content to greatly enhance our growing direct-to- consumer offerings.
“The deal will also substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world.”
Rupert Murdoch, the Executive Chairman of 21st Century Fox, also welcomed the deal.
“We are extremely proud of all that we have built at 21st Century Fox, and I firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace in what is an exciting and dynamic industry,” Murdoch said.
“Furthermore, I’m convinced that this combination, under Bob Iger’s leadership, will be one of the greatest companies in the world. I’m grateful and encouraged that Bob has agreed to stay on, and is committed to succeeding with a combined team that is second to none.”
At the request of both 21st Century Fox and the Disney Board of Directors, Iger has agreed to continue as Disney chairman and chief executive officer through the end of calendar year 2021.
A number of Disney employees may lose their jobs as a result of the deal. The acquisition is expected to yield at least $2 billion in cost savings for Disney from efficiencies realized through the combination of businesses, the statement said.
The boards of directors of Disney and 21st Century Fox have approved the transaction, which is subject to shareholder approval by 21st Century Fox and Disney shareholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act and a number of non-U.S regulations.
–Staff and wire reports
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