Disney will reportedly buy 21st Century Fox's TV business for $52.4 billion.
- Disney will buy Fox's film studio and a large chunk of its television production assets for $52.4 billion.
- The properties acquired include Fox's 39% stake in Sky, Star India, a collection of pay-TV channels like FX and National Geographic, and popular entertainment brands like X-Men, Avatar and The Simpsons.
- Disney Chief Executive Officer Bob Iger will remain at the company through 2021.
- The deal announcement follows months of interest from multiple parties, including Disney, Comcast and Verizon.
Disney has agreed to acquire 21st Century Fox's film studio and a large chunk of its television production assets for $52.4 billion.
Fox shareholders will receive 0.2745 Disney shares for each unit of Fox stock they own. Disney also announced that it will buy back $10 billion of stock to offset the share dilution from the deal.
The package that Disney is buying includes Fox's 39% stake in Sky across Europe, Star India and a collection of pay-TV channels, including FX and National Geographic. The deal also includes popular entertainment properties like X-Men, Avatar and The Simpsons, according to a press release.
Immediately prior to the completion of the acquisition, Fox will spin off its broadcasting network and stations, which includes Fox News, Fox Business, FS1, FS2 and Big Ten Network. The entity will become a newly listed company that will be distributed to its shareholders.
Disney Chief Executive Officer Bob Iger will remain with his company through 2021 to "provide the vision and proven leadership required to successfully complete and integrate such a massive, complex undertaking," Orin Smith, lead independent director of the Disney Board, said in the release. There was some speculation Iger could leave Disney to enter the 2020 election.
"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," Iger said in a statement. "We’re honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building."
In an interview on "Good Morning America," which airs on Disney-owned ABC, Iger said that current Fox CEO James Murdoch, son of Rupert, will help with the transition. He also said they'll "be discussing whether there is a role for him or not at our company."
The deal announcement comes amid considerable interest for Fox from not just Disney, but also the likes of Comcast and Verizon. The Wall Street Journal and CNBC reported in November that Comcast and Verizon had approached Fox about buying at least part of the company, providing the first signs of a bidding war.
Now that transaction terms have been agreed upon, the new entity will have to contend with rating declines across many large cable networks as more consumers opt for cheaper and more customizable web-based services.
The deal is likely to come under heavy scrutiny, as the US Justice Department has recently thrown a wrench into another mega-deal in the media space: AT&T's attempt to buy Time Warner for $84.5 billion. The regulatory body sued to block the deal in November, saying it would "greatly harm to American consumers."
Fox's stock declined 1.3% in pre-market trading, while Disney fell 0.7%.