Walt Disney Co (NYSE:DIS) has announced that it plans to acquire a majority stake or the whole of Twenty-First Century Fox Inc Class A (NASDAQ:FOXA) in a deal that will possibly be the biggest ever in Hollywood.
The deal which was announced on Thursday has been rumored to be worth north of $50 billion. Rumors have suggested that the acquisition might be valued at around $52 billion. However, sources familiar with the negotiations reportedly revealed that the deal will be valued at around $75 billion or $40 per share. Either way, analysts expect the value to be north of $50 million considering that FOX is one of the biggest television and film businesses and it has a global audience.
We believe the assets we are acquiring — the cable channels, sports networks — are fully complementary with our plans to go to direct to consumer,”statedDisney CEO, Robert Iger.
The acquisition of Fox is a strategic move especially in terms of access to franchises. The deal will allow Disney to get access to 21st Century Fox franchises such as “The Simpsons” and “X-Men” among others. This means these franchises will be rubbing shoulders with the likes of Pixar films and major franchises such as “Star Wars.”
If the deal goes through, 20th Century Fox will become a separate entity from the Fox Broadcasting network as well as Fox stations. The acquisition is expected to lead to a major restructure of the huge media empire that is Fox which is owned by Rupert Murdoch.
The deal has been announced amid a shift in the media consumption trends especially with disruptive players such as Netflix, Inc. (NASDAQ:NFLX) taking up a huge part of the market. The changing trends have threatened mainstream media, forcing them to innovate and adapt to the online shift. Disney’s acquisition of Fox is part of the company’s plan to shift and adapt to maintain strong profitability and market dominance. So far some of the details such as the closing date for the acquisition are yet to be revealed.
Walt Disney stock closed Thursday’s trading session at $110.57.
