The Walt Disney Company and 21st Century Fox have entered into a definitive agreement for Disney to acquire 21st Century Fox, including the Twentieth Century Fox Film and Television studios, along with cable and international TV businesses, for approximately $52.4 billion in stock.
Immediately prior to the acquisition, 21st Century Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders.
Under the terms of the agreement, shareholders of 21st Century Fox will receive 0.2745 Disney shares for each 21st Century Fox share they hold, subject to adjustment for certain tax liabilities.
Disney will also assume approximately $13.7 billion of net debt of 21st Century Fox. The acquisition price implies a total equity value of approximately $52.4 billion and a total transaction value of approximately $66.1 billion for the business to be acquired by Disney, which includes consolidated assets along with a number of equity investments.
Commenting on the acquisition, Robert A. Iger, chairman and CEO, The Walt Disney Company, said: “The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before.
“We’re honoured and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building, and we’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings. The deal will also substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world.”
Rupert Murdoch, executive chairman of 21st Century Fox, added: “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.
“Furthermore, 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.”
At the request of both 21st Century Fox and the Disney board of directors, Robert A. Iger has agreed to continue as chairman and CEO of The Walt Disney Company through the end of calendar year 2021.
Orin C. Smith, lead independent director of the Disney board, said: “When considering this strategic acquisition, it was important to the board that Bob remain as chairman and CEO through 2021 to provide the vision and proven leadership required to successfully complete and integrate such a massive, complex undertaking.
“We share the belief of our counterparts at 21st Century Fox that extending his tenure is in the best interests of our company and our shareholders, and will be critical to Disney’s ability to effectively drive long-term value from this extraordinary acquisition.”
Commenting on the acquisition, Paolo Pescatore, VP, Multimedia and Media, CCS Insight, said: “This deal is all about Disney taking greater control of its destiny throughout the entire value chain, from content production to distribution.
“Even a giant like Disney has not been immune to changing behavioural patterns as consumers have embraced new ways of watching TV shows and movies.”
“The move will firmly establish Disney as one of the leading media companies in the world and puts it in a great position to compete head on with the threat posed by the Web providers such as Amazon and Facebook.
“With its slew of franchises, which will continue to grow, it is well placed to generate new sources of revenue.”
“Further disruption lies ahead and we believe that this acquisition will force others to react.”