Rumors that The Walt Disney Company (DIS – Free Report) will acquire most of the film and TV business of Twenty-First Century Fox (FOXA – Free Report), has finally turned true. The takeover has been signed at $52.4 billion in an all-stock deal.
Under the terms of the deal, Fox stockholders will receive 0.2745 Disney shares for each share held. Fox shareholders will be granted a 25% stake in Disney, and Disney CEO Bob Iger will remain in charge through at least 2021. Disney will assume roughly $13.7 billion of 21st Century Fox’s debt, bringing the total value of the planned transaction to $66.1 billion. The transaction, pending regulatory approval, is expected to complete in 12 to 18 months.
A Big Boon to Disney?
The House of Mouse, which is a home to Lucasfilm (the “Star Wars” movies), Marvel (the “Avengers”) and Pixar (“Toy Story”) as well as the Disney brands, will own Fox’s film production businesses including Twentieth Century Fox, Fox Searchlight and Fox 2000. This would bring the “X-Men”, “Fantastic Four” and “Deadpool” rights back into the Marvel fold and add “Avatar” — the highest grossing movie in history — to Disney’s family of franchises.
Additionally, Disney will acquire the Fox film studio with hit TV series including This Is Us, Modern Family, and The Simpsons, regional sports networks and entertainment cable channels like National Geographic, FX Networks, Fox Sports Regional Networks, as well as international networks like Star India, a controlling stake in Hulu, and a 39% stake of European satellite provider Sky.
Given this, the move would bolster Disney’s streaming and television content and come as a prerequisite to its planned launch of an ESPN streaming service in 2018 and the studio’s streaming service in 2019. It would also spur the competitive positive of Disney and pose a significant threat to growing digital rivals like Netflix (NFLX – Free Report) and Amazon.com (AMZN – Free Report).
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