Disney gets approval for Fox acquisition

Disney gets approval for Fox acquisition
Published: 1 July 2018 - 7:34 a.m.
By: Pranav Vadehra

The US Department of Justice has cleared the way for Disney to acquire the assets of 21 Century Fox with the only condition to the deal being the sale of Fox’s regional sports networks. US regulators cleared the bid to acquire most of 21st Century Fox, removing Disney's final hurdle in the ongoing saga for control of Fox assets, however, the deal will still need to go through approval in other countries.

The DOJ said the approval requires the sale of Fox’s regional sports networks in the US, due to antitrust competition concerns. Disney released a statement saying it was pleased with the decision, having already indicated its willingness to sell the sports networks. “The acquisition of 21st Century Fox will bring significant financial value to the shareholders of both companies,” said Disney boss Robert Iger.

Disney's head to head battle with Comcast had seen them raise the offer for 21st Century Fox to $71.3 billion (€61.6bn) in cash and shares, up from the earlier $52 billion offer agreed in December 2017. The move valued Fox at $38 a share, some $10 higher than Disney’s first offer in December. Comcast’s current offer stood at $65 billion cash.

21st Century Fox had in recent weeks recommended to its shareholders that Comcast’s bid holds a higher risk of being delayed or denied by antitrust regulators than the bid from Walt Disney. Fox’s board has endorsed the Disney deal, saying it would have an easier route to approval and citing the work already done by the two companies towards closing the merger.

Fox said that its board and legal advisors concluded that, “a strategic transaction with Comcast continued to carry higher regulatory risk leading to the possibility of significant delay in the receipt of merger consideration as well as the risk of an inability to consummate the transactions.”

Disney acquisition of Fox’s entertainment assets is part of the ongoing wave of consolidation, as media companies look for global scale to compete with streaming giants such as Netflix and Amazon.

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