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Rupert Murdoch’s 21st Century Fox has agreed to sell its entertainment businesses to Walt Disney in a landmark $66bn deal with far reaching implications for the global media landscape if it is approved by regulators.
Disney will consolidate its position as the world’s largest media company if the deal is cleared, adding Fox’s 39 per cent stake in Sky, the pan-European broadcaster, and the 20th Century Fox movie studio to a vast portfolio of brands and intellectual property that spans Mickey Mouse to Captain America and Han Solo.
Under the terms of the agreement, Disney will pay $52.4bn in stock. Including $13.7bn in debt, the total transaction value is $66.1bn. Shareholders of 21st Century Fox will receive 0.2745 in new Disney shares for each 21st Century Fox share they hold. Fox shareholders will own about 25 per cent of the combined company.
Bob Iger, Disney’s chief executive, has extended his contract until 2021. “We’re honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building,” he said, adding that the deal would “significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings”.
Mr Murdoch said: “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.”
The deal will end Mr Murdoch’s long association with Hollywood and represents a parting of the ways between the mogul and his youngest son, James, Fox’s chief executive. The two companies did not comment on his future but James is likely to leave Fox upon completion of the sale.
Disney said it would seek $2bn in cost savings from the deal. It expects Fox to complete its takeover of pan-European TV group Sky by the end of the first half of next year. Disney will end up as the ultimate owner of Sky as long as that transaction completes before Disney’s deal.
Image source: Business Wire