Clearing the way for one of the largest corporate takeovers in recent times, shareholders of Disney (DIS) and 21st Century Fox (FOXA) approved Disney’s $71.3-billion buyout of the latter’s assets. According to sources, the merger is expected to close in the first half of next year. The Fox assets involved in the transaction include the 20th Century Fox studio, FX Networks and National Geographic Partners.
The proposal was cleared in a majority vote, at special meetings convened by the parties simultaneously in New York, with only one shareholder (Disney) raising the objection. It is widely perceived that the coming together of Disney and Fox would change the American entertainment industry forever.
The approval takes the historic deal one step closer to realization, after a long-drawn battle between Disney and Comcast (CMCSA) to acquire Fox. The pursuit for Fox took a turn about eight months ago when the New York-based media firm agreed to sell its assets to Disney for $52.4 billion.
“Combining the 21CF businesses with Disney and establishing new ‘Fox’ will unlock significant value for our shareholders. I want to thank all of our executives and colleagues for their enormous contributions in building 21st Century Fox over the past decades,” said 21st Century Fox executive chairman Rupert Murdoch.
The Fox assets involved in the transaction include the 20th Century Fox studio, FX Networks and National Geographic Partners
Last week, Comcast officially announced its decision to end the bidding war with Disney and let go of Fox, putting an end to months of speculation. To the advantage of Fox, the initial offer price of about $50 billion was raised several times before it reached $71 billion as the companies continued to outbid each other.
It is learned that Comcast was discouraged by fears of getting into antitrust issues, especially after the Department of Justice (DoJ) appealed against the AT&T-Time Warner deal and Fox revealed its preference for Disney.
Earlier, Disney received approval from the DOJ to go ahead with its plan – a major regulatory hurdle in its pursuit for Fox. While the companies need to get the green signal from a few more agencies, the process will be relatively hassle-free.
As per the terms of the agreement, Disney will be paying $35.7 billion in cash and issuing 343 million new shares to stockholders of 21st Century Fox. Now that the future of Fox is almost certain, the market will be shifting its focus to another ongoing takeover battle – between Comcast and Fox for the assets of UK-based television streamer Sky plc.
Meanwhile, shares of Disney and 21st Century Fox opened Friday’s regular session lower and maintained the downtrend in the early trading hours.