Comcast Corporation (CMCSA) decided to abandon its pursuit of 21st Century Fox (FOX), finally putting to rest all the speculations about this episode on Wall Street. Comcast was locked in a battle with Walt Disney Co. (DIS) for the film and TV assets of Fox, which saw both companies outbidding each other and Disney raising its offer up to $71 billion.
With Comcast bowing out, Disney’s latest sweetened offer has prevailed, marking the end of a very interesting duel. There is another bidding war going on between Comcast and Fox for the assets of European pay-TV company Sky plc. Fox already owns 39% of Sky and wants to take over the remaining 61%. Fox received approval from the British authorities only recently for its purchase of Sky.
According to a report by CNBC, the Justice Department’s recent decision to appeal against the AT&T-Time Warner deal as well as Fox’s inclination towards Disney were said to have played a part in Comcast dropping its pursuit for Fox. In addition to this, Comcast was wary about the pricing and how many assets it would have to offload in order to get approval for the deal.
With Fox shareholders getting ready to vote on the Disney deal by the end of this month, Comcast was also facing a time crunch with regards to raising its offer for Fox. Comcast was also doubtful over how its bidding for Fox would affect its bidding for Sky. With all these concerns looming, Comcast decided it was better to focus on acquiring Sky. Last week, Fox offered to pay $32.5 billion for Sky and Comcast immediately raised its bid to $34 billion.
Disney, meanwhile, is pleased with this new development. Since the company has already received approval from the DOJ for its acquisition of Fox, it does not seem to have any other hurdles in its path to keep it from closing the deal as soon as possible.
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