Disney’s $52.4 billion deal
Disney (DIS) agreed to acquire some media and entertainment assets from 21st Century Fox (FOXA) for an equity value of $52.4 billion in December. Disney has also planned to acquire 21st Century Fox’s net debt of roughly $13.7 billion, which would bring the total transaction value to nearly $66.1 billion. The merger has yet to receive regulatory approval, but it’s expected to go through in late 2018 or early-to-mid 2019.
However, Comcast’s (CMCSA) latest announcement to buy Fox’s film and TV assets have spurred tensions and have complicated the deal between Disney and Fox. According to a Reuters report, Comcast is looking to raise as much as $60 billion for Fox’s assets but is also waiting for the outcome of the antitrust merger trial involving AT&T (T) and Time Warner.
Focus on original content
According to the deal’s terms, Disney is looking to buy 21st Century Fox’s film and television units such as FX and National Geographic as well as cable and significant TV businesses like Star network and Sky Disney. The remaining news, broadcast, and sports assets are to be retained by the management of 21st Century Fox. Further, 21st Century Fox has decided to spin off into a newly listed company, Fox, just before the acquisition.
The acquisition of the Fox assets is vital for Disney, as it would give the media behemoth access to Fox’s premium collection of movies and television programming. Media companies are looking to grow their assets amid stiff competition and rising demand for original series and sports content. Online streaming giants Netflix (NFLX) and Amazon have dominated the space and been investing massively in original content. Verizon, Amazon, and Fox are also pushing hard to acquire the sports rights for NFL games across their digital platforms.