Rupert Murdoch is selling a big chunk of his media empire for $52.4 billion to the Walt Disney Company.
Disney announced it is acquiring 21st Century Fox Film and Television Studios along with cable and international TV businesses in a stock deal that will see Fox shareholders get 0.2745 Disney shares for each Fox share. Reuters calculates this translates to a value of a $29.50 per share.
Apart from the studios that produce the blockbuster Marvel superhero pictures and the “Avatar” franchise, as well as hit TV shows such as “The Simpsons”, Disney will also get a 39 percent stake in Sky Plc, Star India, and a number of pay-TV channels that include FX and National Geographic.
The deal also delivers Disney majority control of Hulu. Fox’s 30 per cent stake will give Disney a controlling interest of 60 per cent of Hulu.
It allows Fox to focus on more profitable news and sports sides of its business. As such, it will hold on to the Fox broadcast network, Fox Sports, and the Fox News and Fox Business brands. These will be spun off into a separate company.
The deal amounts to a massive downsizing for 86 year old former Australian Rupert Murdoch. It comes at a time when alternative forms of online entertainment such as Netflix have led millions of pay-TV subscribers to cut the cord.
“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,” Mr Murdoch said.
Disney CEO Bob Iger, who was due to step down in 2019, will now extend his time as CEO of the Walt Disney Company through to 2021.
There is at this stage no indication of who his successor will be.
According to Bloomberg. Murdoch’s son James, who is Fox’s chief executive officer, will probably step away from what’s left of the Murdoch’s empire but if Disney offers him a job then he could vie to succeed Iger.
The deal is important for Disney which is now looking to open its own streaming service to compete with Netflix as it provides the company with a large catalogue of shows and TV series that it can run exclusively on its service.