Disney’s acquisition of Fox will be effective from March 20
The Walt Disney Company (DIS) is finally about to close its deal with 21st Century Fox (FOX). After receiving the green light from regulators, the media giant announced on March 12 that its deal with Fox would go into effect next week on March 20.
Disney’s initial bidding price for Fox was $52.4 billion, but a bidding war with Comcast (CMCSA) drove the price up to $71.3 billion. The acquisition means that Disney will have a 60% stake in streaming service Hulu, which had 25 million subscribers at the end of 2018—an addition of 8 million subscribers in the year.
A controlling stake in Hulu
Hulu said that its revenue grew a whopping 45% in 2018. However, it continues to bleed. It lost nearly $1.5 billion last year as it continued to invest heavily in content. In the face of stiff competition, Hulu has made a niche for itself, as it offers both video-on-demand (which includes its suite of original content) and live TV streaming options.
Disney’s CEO, Bob Iger, told investors that the company plans to keep Hulu as an adult-targeted streaming service, while Disney+, its upcoming streaming service, will be focused on content for kids and families.
Disney’s acquisition of Fox’s key assets is the latest sign of consolidation in the media sector after AT&T completed its acquisition of Time Warner. Such consolidation may have been necessitated by streaming services such as Netflix disrupting the sector.