The Walt Disney Company has struck a deal with media mogul Rupert Murdoch to acquire 21st Century Fox, which includes the Twentieth Century Fox Film and Television studios and its cable and international TV businesses, in exchange for $52.4 billion in stock.
The deal is likely to be very consequential in the media industry, expanding Disney’s already-considerable reach in the entertainment market, adding franchises like “Avatar”, “X-Men”, and “The Simpsons” to a catalog that boasts films from Marvel Studios, Lucasfilm, and Pixar Animation Studios.
Disney will also gain the rights to 22 regional sports broadcasting networks in the US, international Fox assets like India’s Star TV network, as well as a stake in European broadcaster Sky plc. The Fox Broadcasting network, which includes the Fox News Channel and Fox Business News, will be spun off into a new company.
“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,” said Disney CEO Bob Iger in a press release. “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.”
Under the terms of the all-stock deal, Fox shareholders will receive 0.2745 Disney shares for each Fox share held. Disney will also assume approximately $13.7 billion in Fox debt. Rumors of the deal, which first surfaced in November, sent Fox shares surging by 30 percent. Upon confirmation of the deal on Thursday, the shares climbed 5 percent further.
The acquisition also paves the way for the entertainment conglomerate to compete with streaming giants like Netflix and Amazon, by offering content exclusively on its own streaming service. Disney announced earlier this year in August that its distribution deal with Netflix is due to end sometime in 2019. The company plans to launch an ESPN-branded sport video streaming service in 2018, followed by a Disney-branded streaming service in 2019.
“The deal illustrates the huge strategic challenge traditional media companies face and how they need to reinvent their business models to compete with digital, online competitors such as Netflix, Google and Amazon,” said Nick Jones, partner and head of technology at Cavendish Corporate Finance, to Reuters. “(It) helps Disney dramatically reduce its reliance on traditional television, a business that has declined over the last two decades.”
This post first appeared on IDrop News - IPhone, IOS, Apple Rumors, News, Tips, Tricks, Reviews, & Deals, please read the originial post: here