DISNEY Acquires FOX For $52.4 Billion (With Some Caveats)

Credit: 20th Century Fox

Walt Disney Company has announced the acquisition of Twenty-First Century Fox for $52.4 billion in stock, while carving out some assets to be retained by Fox's stockholders. As part of the deal, Disney will assume $13.7b of net debt that Fox had on its books. Disney announced the deal Thursday morning, which would be pending final approval from each company's stockholders as well as government regulators.

“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,” said Disney Chairman/CEO Robert A. Iger who as part of the deal renewed his employment contract through 2021. “We’re honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building, and we’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings. The deal will also substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world.”

Credit: 20th Century Fox

Specifically named in Disney's acquistion is the the entertainment properties X-Men,  Fantastic Four, Deadpool, Avatar, The Simpsons, The Grand Budapest Hotel, Hidden Figures, Gone Girl, The Shape of Water, and The Martian.

"The agreement also provides Disney with the opportunity to reunite the X-Men, Fantastic Four, and Deadpool with the Marvel family under one roof and create richer, more complex worlds of inter-related characters and stories that audiences have shown they love," read the Disney press release.

Under the deal, Disney would own Fox's film and televisions tudios, cable entertainment networks (such as the FX channels), National Geographic, as well as its international TV businesses. As part of this deal, Disney would also assume Fox's 30% stake in Hulu - which, combined with Disney's own 30%, would give it majority control over the streaming service (the remainder is owned by Comcast and Time Warner).

Just prior to the acquisition agreement, Fox spun-off the companies behind channels such as Fox, Fox News, Fox Business, FS1, FS2, and the Big Ten Network back to into a new, as-yet-unnamed company, to be owned by Fox's shareholders and not acquired by Disney.

“We are extremely proud of all that we have built at 21st Century Fox, and I firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace in what is an exciting and dynamic industry,” said Rupert Murdoch, 21st Century Fox's Executive Chairman. “Furthermore, 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.”

No mention has been made of Fox's minority stake in BOOM! Studios and who would ultimately own that with the deal.

Credit: 20th Century Fox

Under the terms of this acquisition deal, current 21st Century Fox shareholders will receive 0.2745 Disney shares for each Fox share they hold (subject to adjustment for certain tax liabilities). That will result in approximately 515 million new shares of Disney stock issued to Fox's shareholders, representing a 25% stake in the Walt Disney Company.

The boards of both company have approved the transaction, with plans to present it for approval to its shareholders later this year. If stockholders approve, it would then go before government regulators which is expected to take as long as 18 months.

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