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Disney-Fox Deal Gets Regulatory Nods from Mexico and Brazil


Mar. 13 2019, Published 1:17 p.m. ET

Regulatory approval for Disney-Fox acquisition

On March 11, the Walt Disney Company (DIS) finally received antitrust approval from Mexico’s telecommunications regulators for its purchase of the majority of the media and entertainment assets of 21st Century Fox (FOXA)

The deal will not only boost Disney’s revenues and presence in global markets but also expand its portfolio with Fox’s premium content and help it to compete with digital giants such as Netflix (NFLX), which is attracting traditional cable subscribers with lower prices.

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The conditions in Mexico and Brazil

According to the IFT (Instituto Federal de Telecomunicaciones), the acquisition will reportedly give too much audiovisual content to Disney, which will end the competition in the pay-TV market. Therefore, the institution says Disney needs to separate Fox’s channels, which include National Geographic and Nat Geo Wild, from Disney’s A&E, History, H2, and Lifetime networks. IFT also requires Disney to divest its Fox Sports channels and all the assets of that business to complete the deal.

In February, Brazilian regulator CADE, Brazil’s Administrative Council for Economic Defense, also said that it required Disney to sell Fox Sports in Brazil (EWZ) to gain antitrust approval in the country.

US regulatory approval

US regulators wanted Disney to sell Fox’s 22 regional sports networks as a condition of its completing the deal. Most recently, Disney agreed to sell its 80% stake in regional sports network YES (Yankee Entertainment and Sports) Network to the New York Yankees for $3.5 billion. Amazon (AMZN), along with Sinclair Broadcast Group (SBGI) and Blackstone (BX), is the leading investor in Yankees, which already has a 20% stake in YES Network.

Disney also agreed to sell its interest in A+E Television Networks to get regulatory approval in Europe. A+E is a joint venture of Disney and the privately-held Hearst Corporation.


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