Disney's $71bn takeover of Fox film and TV assets completed
Walt Disney’s $71-billion deal to take over the film and television assets of 21st Century Fox was concluded today.
Under the deal, Disney will absorb the Fox film and TV studios, the FX networks, National Geographic and Star India, the Indian TV giant, while it also plans to launch Disney+, its new streaming service, later this year as it challenges Netflix for future audience share.
Disney has also doubled its 30-per-cent stake in Hulu, the streaming service, making it by far the biggest stakeholder.
Robert Iger, the chairman and chief executive of Disney (pictured), said: “This is an extraordinary and historic moment for us – one that will create significant long-term value for our company and our shareholders.
“Combining Disney’s and 21st Century Fox’s wealth of creative content and proven talent creates the pre-eminent global entertainment company, well-positioned to lead in an incredibly dynamic and transformative era.”
Disney said in a statement: “With 21st Century Fox’s iconic collection of businesses and franchises, Disney will be able to provide more appealing high-quality content and entertainment options to meet growing consumer demand; increase its international footprint; and expand its direct-to-consumer offerings, which include ESPN+ for sports fans, the highly-anticipated Disney+ streaming video-on-demand service launching in late 2019; and Disney and 21st Century Fox’s combined ownership stake in Hulu.”
Mexico’s Federal Telecommunications Institute gave its backing to the takeover last week, subject to conditions that include the sale of Fox Sports channels in the country.
The regulator said that, because the combined audiovisual content of Disney and Fox in factual programming on pay-TV in Mexico would be in excess of 40 per cent, the structural changes were required.
Disney had outbid US cable giant Comcast for the Fox production studios, movie studios and many of its general entertainment cable networks in a deal agreed in December 2017.
Disney has already accepted a demand from CADE, the Brazilian antitrust regulator, for the sale of its Fox Sports channels in that country as the price of approval for the takeover.
Last June, the US Department of Justice gave approval for Disney’s takeover of Fox, on the condition that it sold off Fox’s 22 regional sports networks in the country, and this must be completed within 90 days of the closing of the deal.
Earlier this month, Major League Baseball’s New York Yankees agreed a deal to buy back the Yankees Entertainment and Sports (YES) Network, one of the channels, from Disney for $3.5 billion.
The interested parties for the remaining channels include MLB, TEGNA, the broadcast, digital media and marketing services company, and Sinclair Broadcast Group, the telecoms conglomerate.
Disney is assuming about $13.8 billion in net debt from Fox, and the integration is expected to result in up to 4,000 job losses as operations are combined and resources reallocated to Disney’s newly-prioritised OTT services.