Disney to acquire 21st Century Fox, after business spinoff, for $52.4B

Posted on: December 14th, 2017 by ABC News No Comments

21st Century Fox(NEW YORK) — The Walt Disney Co. is acquiring 21st Century Fox for $52.4 billion in stock, Disney announced on Thursday morning. Fox will spin off and retain some of its properties, including Fox News, but Disney would own Fox’s massive film and TV empires.

“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,” Bob Iger, chairman and CEO of The Walt Disney Co., said in a statement announcing the acquisition.

Disney, which owns ABC News, taking ownership of one the country’s largest movie studios from the Rupert Murdoch-controlled company is one of the biggest media deals in recent years.

“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 a statement.

The remaining 21st Century Fox assets include Fox News Channel, the Fox broadcast network and the Fox Sports 1 sports channel.

Disney, which is home to family friendly films such as “Frozen” and “Finding Dory,” will now also include assets from Fox that target a different demographic, such as FX Networks and National Geographic Channel.

Along with the movie studio and the aforementioned TV channels, Disney will have a majority ownership of Hulu, which airs originally produced series such as “The Handmaid’s Tale.

And added to the Disney library will be TV shows such as “The Simpsons” and classic films such as “The Sound of Music.

During an investor’s call in November, Iger, who took over Disney’s helm in 2005, spoke of the company’s long-term growth. “We continue to make significant investments required to drive long-term growth across our entire company,” Iger said.

He continued, “No other company in entertainment today is better equipped to meet the challenges of the changing world or better positioned for continued growth thanks to our collection of brands, our strong franchises and our unique ability to leverage IP [intellectual property] across our entire company to maximize value and create new opportunities. We’ll continue to invest for the future and take the smart risks required to keep moving forward.”

The acquisition of Fox’s ownership of Hulu will mesh with Disney’s streaming service, slated for a 2019 launch.

During the investor’s call, Iger said the streaming service will offer a “rich array” of content from four of Disney’s major brands: Disney, Pixar, Star Wars/Lucasfilm and Marvel. Iger also said it will have four or five exclusive feature films per year. There are also original series already in development for the service, including a “Star Wars” live-action series, as well as series based on the “Monsters” film and the “High School Musical” series. The service will also offer thousands of hours of Disney film and TV library product, he added.

But before Disney’s as-of-yet unnamed streaming service makes its debut, ESPN’s streaming service, ESPN+ will make its debut this spring, Iger announced during the investor’s call. ESPN+ will be accessible through a new and fully redesigned app, “which will allow users to access sports scores and highlights, stream our channels on an authenticated basis and subscribe to ESPN+ for additional sports coverage, including thousands of live sporting events,” Iger said.

Iger spoke enthusiastically about ESPN+, telling investors, “This one app experience will be a one-of-a-kind product, offering sports fans far more than they can get on any other app, website or channel and immediately propelling ESPN in the new direction.”

Iger also spoke of Disney’s various acquisitions in recent years, and how they have helped lift the company to new heights.

“The acquisition of Marvel helped drive our studio’s performance since 2009,” he said, referring to Disney’s acquisition of Marvel Entertainment. “The movies we release in the Marvel cinematic universe to-date have delivered an average global box office of more than $840 million each.”

Igar also spoke about the company’s 2006 acquisition of Pixar, the animated studio that was led by the late Apple co-founder Steve Jobs.

“As you know our acquisition of Pixar effectively revitalized our entire animation business, which is essential to the health of our company,” he said. “Since that acquisition, the average global box office for our animated movies has risen to more than $665 million, and we’ve captured nine of the 10 Oscars awarded for feature animation.”

Lucasfilm, the production company behind “Star Wars,” acquired by Disney five years ago, has also been an integral part of the company, Iger said.

“We had big ambitions for the ‘Star Wars‘ franchise when we acquired Lucasfilm five years ago and are already exceeding our expectations,” he said. “‘The Force Awakens‘ and ‘Rogue One‘ alone delivered more than $3 billion at the box office revealing the tremendous and enduring appeal of this franchise and establishing a strong foundation for the future.”

Iger concluded the call saying, “We remain optimistic about our future in part because quality truly does matter and the quality of our content, our products and our services set Disney apart.”

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