Fox and Disney sign new merger deal, rejecting Comcast’s all-cash $65 billion bid
The Walt Disney Company and 21st Century Fox have struck a new merger agreement, with Fox's leadership having rejected Comcast's attempt to outbid Disney.
Under the new acquisition agreement announced on Thursday, Disney would buy Fox for $71.3 billion in cash and stock. This comes one week after Comcast offered Fox $65 billion in cash, which topped Disney's previous deal to buy Fox for $52.4 billion in stock.
The term "accepted" may be misinterpreted in this scenario. This does not mean that Fox is now selling to Disney for $71.3 billion and everything is a done deal. What this means is that the company officially recognizes Disney's bid as the single best option on the table. If a better offer is not made, this will be the deal that moves forward.
Comcast could try to outbid Disney again, but it has not responded to the new Disney/Fox deal yet.
According to Ars Technica, Fox appears to be reluctant to strike a deal with Comcast because of concerns about getting regulatory approval from the federal government.
"Disney believes the transaction has a clear and timely path to regulatory approval," Disney's announcement said. "Both companies have spent the past six months working toward meeting all conditions necessary for closing."
Shareholder approval needed
Disney's new offer consists of $35.7 billion in cash, with the rest in stock. The new agreement was approved by the boards of Disney and Fox but still needs approval from the companies' shareholders, reports ABC.
The Fox’s hoard
The sale to either Disney or Comcast would include 21st Century Fox's film and television studios, cable entertainment networks, the Fox Sports Regional Networks, and international properties including Star in India and Fox's 39% ownership of Sky across Europe.
Fox owns rights to numerous intellectual properties, including animated TV series like The Simpsons and Family Guy. In addition, it would let Disney combine Fox’s X-Men and Fantastic Four franchises with its existing Marvel universe, which could potentially change the pop culture scene for decades to come.
The sale would also include Fox's 30% stake in Hulu. Comcast already owns 30% of Hulu, so this deal would give it majority control of the online video service. Disney also has a 30% stake in Hulu, while Time Warner owns 10% of the company.
The Fox sale would not include major assets such as the Fox News Channel, Fox Business Network, and Fox Broadcasting Company.