Walt Disney Company’s Bob Iger might have just secured the deal of a lifetime as Disney acquired large parts of 21st Century Fox in an all-stock deal valued at $52.4 billion or $66.1 billion including debt. Iger previously acquired Marvel, Pixar, and Lucasfilm.
Disney will acquire Fox’s film and TV studio, National Geographic, FX, regional sports networks, Star India and other international networks, a 30% stake in Hulu, and a 39% stake in European television channel Sky.
Fox will split off Fox News Channel, Fox Business Network, Fox Sports 1, Fox Sports 2, the Big Ten Network, and their Fox Broadcasting network and stations into a separate company. Additionally, the 53-acre Fox studio on Pico Boulevard in Los Angeles will stay with Rupert Murdoch, the head of Fox.
What might be the most interesting part of the deal is that Murdoch’s family will become key shareholders in Disney stock. Fox shareholders are expected to now own a 25% stake in Disney with Murdoch’s family trust owning 5%. It’s possible James Murdoch will also be offered a senior executive role with Disney once the transaction comes to a close. Disney boss Bob Iger said they were still discussing the possibility, “He and I will continue to discuss whether there is a role for him here or not.”
Bob Iger will also see his contract with Disney extended to 2021.
Fox shareholders with receive .2745 Disney shares for each Fox share they hold. Disney will also assume $13.7 billion of Fox’s net debt.
Disney celebrated the intellectual properties they will obtain in the deal.
Combining with Disney are 21st Century Fox’s critically acclaimed film production businesses, including Twentieth Century Fox, Fox Searchlight Pictures and Fox 2000, which together offer diverse and compelling storytelling businesses and are the homes of Avatar, X-Men, Fantastic Four and Deadpool, as well as The Grand Budapest Hotel, Hidden Figures, Gone Girl, The Shape of Water and The Martian—and its storied television creative units, Twentieth Century Fox Television, FX Productions and Fox21, which have brought The Americans, This Is Us, Modern Family, The Simpsons and so many more hit TV series to viewers across the globe.
Bob Iger commented on how the deal fits into Disney’s plan to expand their international reach and offers more storytelling opportunities:
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. 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.
Rupert Murdoch was also excited about the new deal and believes it will lead to more success:
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. 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.
However, the deal will face significant regulatory hurdles.
“The boards of directors of Disney and 21st Century Fox have approved the transaction, which is subject to shareholder approval by 21st Century Fox and Disney shareholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act, a number of other non-United States merger and other regulatory reviews, and other customary closing conditions,” they said.
Top analysts believe it could take more than a year before the deal is officially approved.