Disney Agrees To Buy 21st Century Fox Assets For $52.4 Billion

After weeks of mounting speculation - and a rumored competing bids by rivals Comcast Corp. and Verizon that never materialized - Disney and 21st Century Fox announced early Thursday that the former would acquire most of the latter's entertainment assets in a deal worth $52.4 billion, according to the official press release.

Here's what Disney is buying, according to the release:

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. Disney will also acquire FX Networks, National Geographic Partners, Fox Sports Regional Networks, Fox Networks Group International, Star India and Fox’s interests in Hulu, Sky plc, Tata Sky and Endemol Shine Group.

Fox will then spin off the Fox Broadcasting network, Fox News, Fox Business, FS1, FS2 and Big Ten Network to its shareholders into a newly listed company. Under the terms of the agreement, shareholders of 21st Century Fox will receive 0.2745 Disney shares for each 21st Century Fox shares they hold. Disney will also assume approximately $13.7 billion of net debt of 21st Century Fox.

Meanwhile, Robert Iger, who was supposed to retire at the end of next year, will stay on to lead the Disney until at least 2021 (at this point, the long-time CEO, who has blown through many planned retirement dates, might lead the House of Mouse for the remainder of his natural life).

The deal is the largest ever in Disney's history, and comes just a day before the release of "The Last Jedi" the latest installment in its lucrative "Star Wars" series - a franchise it acquired a few years back.

According to the press release, "the acquisition is expected to yield at least $2 billion in cost savings from efficiencies realized through the combination of businesses, and to be accretive to earnings before the impact of purchase accounting for the second fiscal year after the close of the transaction."

Furthermore, as part of the transaction higlights, there appears to be a "fudge factor" related to the company's tax liabilities, which are clearly in flux as a result of the ongoing tax reform drama. This is how Disney plans to resolve this uncertainty:

Terms of the transaction call for Disney to issue approximately 515 million new shares to 21st Century Fox shareholders, representing approximately a 25% stake in Disney on a pro forma basis. The per share consideration is subject to adjustment for certain tax liabilities arising from the spinoff and other transactions related to the acquisition. The initial exchange ratio of 0.2745 Disney shares for each 21st Century Fox share was set based on an estimate of such tax liabilities to be covered by an $8.5 billion cash dividend to 21st Century Fox from the company to be spun off. The exchange ratio will be adjusted immediately prior to closing of the acquisition based on an updated estimate of such tax liabilities. Such adjustment could increase or decrease the exchange ratio, depending upon whether the final estimate is lower or higher, respectively, than the initial estimate. However, if the final estimate of the tax liabilities is lower than the initial estimate, the first $2 billion of that adjustment will instead be made by net reduction in the amount of the cash dividend to 21st Century Fox from the company to be spun off. The amount of such tax liabilities will depend upon several factors, including tax rates in effect at the time of closing as well as the value of the company to be spun off.

Fox will keep its studio plot in LA and much of its real-estate holdings.

(Courtesy of Bloomberg)

Rupert Murdoch, the longtime chairman of 21st Century Fox, said: “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."

As the Financial Times pointed out, the deal will end Murdoch’s long association with Hollywood and represents a division between the media mogul and his youngest son, James, Fox’s chief executive. The two companies did not comment on his future but James is likely to leave Fox upon completion of the sale.

Disney said it would seek $2 billion in cost savings from the deal. It expects Fox to complete its takeover of pan-European TV group Sky by the end of the first half of next year. Disney will end up as the ultimate owner of Sky as long as that transaction completes before Disney’s deal.

According to the New York Times, Disney, which owns ABC and ESPN, hopes 21st Century will supercharge its plans to introduce two Netflix-style streaming services. The company's first major streaming effort, ESPN Plus, will arrive in the spring.

A second and still unnamed offering, built around the company's Disney, Marvel, Lucasfilm and Pixar brands, will likely be introduced late next year. Both Fox and Disney already own stakes in Hulu, a paid streaming service that already includes ABC content. Iger is personally buying out Fox's minority stake in Hulu.

Comments

lil dirtball cossack55 Thu, 12/14/2017 - 08:01 Permalink

It's not a matter of boycotting. It's a matter that the shit is all toxic brainfuck. Kick the goddamned TV to the curb. Smash it so it can't fuck with someone else's mind. It's is not your friend and is in fact the worst house guest you can find.

The blipverts are real, only people don't explode. They just become stupid and apathetic.

In reply to by cossack55

vofreason TahoeBilly2012 Thu, 12/14/2017 - 10:46 Permalink

Maybe the will when Trump's policies finally put the nail in the coffin of the lives of his supporters ..... crushing any clean energy jobs they could have had, taking away their health insurance, not giving them any tax breaks.  He's fondling around in your pockets while telling you he's helping......but once you realize it will be too late and you won't be able to pay for cable anyway.  Hopefully this changes Fox Entertainment "News" somehow so they are brainwashing you with nonsense a little less.

In reply to by TahoeBilly2012

The Wizard arkel Thu, 12/14/2017 - 08:11 Permalink

It is a consolidation of cultural deprivation. On one hand it limits control in the hands of a few sickos, on the other hand it makes it easier to identify them for having a classless product. The only way to stop their perversion is for people to stop purchasing the product. It speaks volumes on how American culture has sunk to low levels when it comes to the laws of nature.

In reply to by arkel

OCnStiggs totenkopf88 Thu, 12/14/2017 - 08:21 Permalink

So far, Fox is the only one covering the whole FBI/DOJ conspiracy in intimate detail on their morning show. In the evening, Tucker Carlson dismembers any liberal trying to support the Deep State. His nightly expose is damning.I see little mention of ANY of these on the Lamestream Media outlets. Just more "RUSSIA-RUSSIA-RUSSIA" crappolla.Tell me you see ANYTHING like this collection on MSNBC or See BS...https://www.youtube.com/watch?v=BKqKpnMcJSQ&feature=youtu.be

In reply to by totenkopf88

vofreason OCnStiggs Thu, 12/14/2017 - 10:55 Permalink

It's just so crazy you people believe Fox Entertainment.....they're not a news channel!!!.......they aren't even allowed to operate in other countries because something like 90% of what they say is misleading or false.  Those 3 morning hosts are some of the dumbest people I've ever seen and their "stars" are just scumbags. It takes a really low mental ability level to buy into them ......... about as dumb as that Moore attorney who didnt' know swearing on the bible to get into congress wasn't the law.  I mean these are the brain dead, backwater metal midgets that think America was founded by Jesus.  Just pathedic and it would be funny if there weren't so many acting as the anchor of America dragging us under.

In reply to by OCnStiggs

E. Phil Chew Thu, 12/14/2017 - 07:45 Permalink

IMHO, the first thing that happens at Fox Sports television is all the espn people who went there after being laid off are gonna be gone again - half of 'em burned bridges.  Second thing, shift to the left in every aspect.......and the first thing that happens at Fox Sports Radio on close of sale:  Clay Travis is fired in a very public manner.  He's been absolutely blasting espn/Disney about going so far left...... and he's a Democrat, voted for El Guapo, voted for Teh Hilldabeast, etc.

historian40 Thu, 12/14/2017 - 07:59 Permalink

Hmm, I wonder if they'll be acquring the publishing company that prints the satanic bible too.  The "conservative christians" who just love pushing FOX as "good news"(gospel) can't wrap their heads around the fact that their messenger has a forked tongue.

Jack Offelday Thu, 12/14/2017 - 08:02 Permalink

Further consolidation of the major media is not a good thing.  Once again, more power in the hands of fewer people.  Turn off the TV, don't go to movies, quit buying newspapers and magazines, don't support their advertisers, etc. ... hit them where it hurts.  Support alternative/independent media (ZeroHedge).

BlindMonkey Thu, 12/14/2017 - 08:04 Permalink

I'm just waiting for them to come out and create the pedophile network to help both the boys adjust to getting stump trained by Democrat operatives and helpful hints to old democrats in how to easily obtain pizza and hotdogs without shame. 

Whoa Dammit Thu, 12/14/2017 - 08:14 Permalink

Spend $51 billion to save $2 billion. Winning!Sounds like a wife explaining a shopping trip to her husband. "Honey look what I got and I saved $2 billion!"

falak pema Thu, 12/14/2017 - 09:03 Permalink

So his Majesty Rupert Murdoch is only left with Fox Newwws to support his buddy the Duck!When you talk of "fake news" you first have to think of Rupert and Fox before you can talk of the rest.Murdoch is the kingpin of using Media to promote a political agenda all over the world.He is "five eyes" in flesh and bloooood !

ConnectingTheDots Thu, 12/14/2017 - 10:10 Permalink

If we continue on our current trajectory, over time there will be about 6 corporations that will own the world.Think about this a for minute, remember the old "company  towns" in mining areas, where the company owned the housing, all the stores, issued the scrip for buying anything in the town, and  of course controlled all the jobs.We will enter an era not of a "company town", but of a "company nation" and ultimately a "company world".If you really think government is master, and corporations are servants, you don't get the big picture. The roles are in reality government serving the interests of the trans-national corporations to continue their access to the bribes (oops I really meant donations) to their reelection campaigns. Thank you Supreme Court of the USA for your unenlightened Citizens United ruling which effectively  legalized bribery of "our" government.Remember, corporations originally started as temporary entities that existed only to accomplish projects for the public good, and once that project was complete, they were dissolved.Interesting how that concept has morphed into what the trans-national corporations are today and are on a path to become in the near future.