Disney Buys Fox Assets in $52 Billion Split of Murdoch Realm

Walt Disney agreed to a $52.4 billion deal to acquire much of the global empire that media baron Rupert Murdoch assembled over three decades, according to Bloomberg.

Holders of Murdoch’s 21st Century Fox will get 0.2745 Disney share for each Fox share, for assets including the movie and TV production house, a 39 percent stake in Sky, Star India, and a lineup of pay-TV channels that include FX and National Geographic, the companies said in statements. The price amounts to about $29.54 a share, based on Disney’s closing price Wednesday.

Via a spinoff, the mogul will continue to run Fox News Channel, the FS1 sports network and the Fox broadcast network in the U.S. Disney CEO Bob Iger will remain in his role through 2021, the companies said. Fox plans to complete its planned acquisition of the 61 percent of European broadcaster Sky that it doesn’t already own, which will wind up in Disney’s hands. They will also assume about $13.7 billion of net debt from Fox but the deal will give them $2 billion of cost savings and start adding to earnings two years after the takeover is complete. The deal will close in 12 to 18 months, Disney said.

Disney beat out rival bidder Comcast for the Fox assets in a deal brought on by dramatic changes in the media landscape. The rise of alternative forms of online entertainment, from Netflix to Snapchat, have led millions of once-loyal pay-TV subscribers to cut the cord, forcing TV companies to band together to ensure their long-term survival. Discovery agreed in July to acquire Scripps, and Time Warner is trying to sell itself to AT&T.

The Justice Department has sued to block that AT&T deal, and Disney’s Fox transaction is also likely to receive heavy regulatory scrutiny by bringing so many media assets under one roof. Disney, the owner of ESPN, is acquiring regional Fox networks that air local basketball and baseball games, giving the company an unprecedented amount of rights to sports programming. Buying Fox’s movie studio will give Disney the rights to make movies based on the X-Men comic books, adding to an already stocked cabinet of superheroes such as Iron Man and Thor.