Disney buying 21st Century Fox for $52.4B in stock

Disney CEO Bob Iger (left) and 21st Century Fox Executive Chairman Rupert Murdoch (right). (Disney)

The Walt Disney Company has officially announced its plans to buy most of 21st Century Fox—including its television and film studios—for $52.4 billion in stock.

As part of the deal, Disney will assume $13.7 billion of net debt of 21st Century Fox, lifting the total transaction cost to approximately $66 billion.

Disney will take ownership of film businesses including Twentieth Century Fox, Fox Searchlight Pictures and Fox 2000, and television creative units, Twentieth Century Fox Television, FX Productions and Fox 21.

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Disney will also acquire FX Networks, National Geographic Partners, Fox Sports Regional Networks, Fox Networks Group International, Star India and Fox’s interests in Hulu, Sky plc, Tata Sky and Endemol Shine Group, according to a news release.

This will give Disney access to properties including “Avatar,” “X-Men,” “Fantastic Four” and “Deadpool,” as well as “The Americans,” “This Is Us,” “Modern Family and “The Simpsons.”

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“We’re honored 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,” said Disney CEO Bob Iger in a statement. “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.”

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. Shareholders of 21st Century Fox will receive 0.2745 Disney shares for each 21st Century Fox share they hold.

“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,” said Rupert Murdoch, executive chairman of 21st Century Fox, in the statement. “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.”

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As part of the deal and at the request of the Disney and Fox boards, Iger will remain in his role as CEO until 2021. He had previously planned to retire in 2019.

Disney intends to use Fox’s content to boost its upcoming direct-to-consumer offerings: ESPN+, which is launching in 2018, and the Disney-branded streaming service set to launch in 2019. Disney also hopes to expand its international reach through Fox’s international holdings, including Fox Networks International with more than 350 channels in 170 countries; Star India, which operates 69 channels; and Sky’s pay TV service reach across the U.K., Ireland, Germany, Austria and Italy.

Fox will continue pursuing its planned full acquisition of Sky, and the companies are expecting that transaction will be finalized by June 30, 2018.