Disney goes shopping

Disney to acquire 21st Century Fox after spinoff of certain units for $52.4B

Disney to acquire 21st Century Fox for $52.4B

The Walt Disney Company (DIS) and Twenty-First Century Fox, Inc. (FOXA, FOX) announced that they have entered into a definitive agreement for Disney to acquire 21st Century Fox, including the Twentieth Century Fox Film and Television studios, along with cable and international TV businesses, for approximately $52.4B in stock.

Building on Disney’s commitment to deliver the highest quality branded entertainment, the acquisition of these complementary assets would allow Disney to create more appealing content, build more direct relationships with consumers around the world and deliver a more compelling entertainment experience to consumers wherever and however they choose.

Immediately prior to the acquisition, 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.

Under the terms of the agreement, shareholders of 21st Century Fox will receive 0.2745 Disney shares for each 21st Century Fox share they hold.

The exchange ratio was set based on a 30-day volume weighted average price of Disney stock. Disney will also assume approximately $13.7B of net debt of 21st Century Fox.

The acquisition price implies a total equity value of approximately $52.4B and a total transaction value of approximately $66.1B which includes consolidated assets along with a number of equity investments.

SKY NEWS

Prior to the close of the transaction, it is anticipated that 21st Century Fox (FOX, FOXA) will seek to complete its planned acquisition of the 61% of Sky (SKYAY) it doesn’t already own. 21st Century Fox remains fully committed to completing the current Sky offer and anticipates that, subject to the necessary regulatory consents, the transaction will close by June 30, 2018.

Assuming 21st Century Fox completes its acquisition of Sky prior to closing of the transaction, The Walt Disney Company (DIS) would assume full ownership of Sky.

DIS closed at $107.61. FOX closed at $32.34.


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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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