It’s official. The Walt Disney Company has reached agreement with 21st Century Fox to acquire Fox’s film and TV studio, the National Geographic and FX cable channels business, Fox’s regional sports networks, international networks, including Star India, Fox’s 30 percent stake in Hulu and its 39 percent stake in European pay TV giant Sky.
“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 CEO and Chairman Bob Iger. “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.”
According to the Hollywood Reporter, the deal is an all-stock purchase worth $52.4 billion dollars, or approximately $66.1 billion when debt is factored in and shares of Fox are valued at around $40. Fox’s stock had been trading on Wednesday at $32.75.
Fox plans to separate its broadcasting network and stations, the Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders. The company will also retain the 53-acre studio lot near Los Angeles, although it’s unclear what the future plans are for the lucrative piece of property on Pico Boulevard.
In addition, Disney has convinced chairman and CEO Bob Iger to extend his contract with the company through the end of 2021. Iger has been mentioned as a potential presidential candidate and was scheduled to leave his position in 2019, but given the magnitude of this deal, he has agreed to stay on for an additional two years.
“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, executive co-chairman of Fox. “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.”
Iger led the charge for Disney to acquire Pixar, Lucasfilm and Marvel, and as big as those acquisitions were, this is by far the biggest deal he’s pulled off to date. It further extends Disney’s lead as one of the world’s biggest and best content companies and future moves are expected including the launch of a streaming video service which is expected to compete with Netflix and Amazon.