Published: Thu, June 14, 2018
Business | By Eloise Houston

Comcast offers to buy Fox media assets for $65 billion in cash

Comcast offers to buy Fox media assets for $65 billion in cash

Comcast made a $65 billion bid Wednesday for Fox's entertainment businesses, setting up a battle with Disney to become the next mega-media company. Whoever wins the bid, should it be accepted by both companies, will acquire much of Fox's film and TV assets, as well as its worldwide holdings (including stakes in Sky and in Star India) and its stake in Hulu. As such, Comcast has improved an offer it discussed with Fox past year by saying it's offering $2.5 billion in case the deal doesn't go through and would reimburse Fox for another $1.5 billion it will owe Disney for breaking their arrangement. Many industry pundits felt as though it would only be a matter of time before the deal went through, until Comcast stepped in to begin making offers on their own, adding some complications to the deal. A vote on Disney's offer is set for July 10th, though Fox issued a statement today claiming they have yet to decide whether or not they will postpone this vote.

Since AT&T's vertical merger got the all-clear from the courts, it seems unlikely that Comcast's bid will be challenged by a newly chastened US Justice Department.

Walt Disney seeking to buy major film and television operations of Rupert Murdoch's 21st Century Fox, which would consolidate two big Hollywood studios.

Critics pointed out that the deal wouldn't be the end of such massive mergers, and may in fact open the doors to similar acquisitions among other companies.

Time Warner, which closed up 1.8% to $97.95 per share Wednesday, was up 0.1% in the after-hours session. The company said the structure of its bid is "at least as favorable to [21st Century Fox] shareholders as the Disney offer". "Barring a third entrant (Internet/tech is possible), we would see the most sensible outcome as splitting the baby, with Comcast getting Sky (which we see as its main goal) and Disney getting most of the rest".

A merger between Fox and Comcast would create a company with a stable of well-known media brands and franchises, such as the X-Men superheroes. Around the same time, the Justice Department sued to block the AT&T-Time Warner deal.

Comcast is expected to lead a wave of traditional media companies trying to combine distribution and production to compete with Netflix Inc. and Alphabet Inc.'s Google. For example, Comcast is reportedly eager to gobble up some of 21st Century Fox's assets.

Roberts wrote in his letter that Comcast is "highly confident" its offer will "obtain all necessary regulatory approvals in a timely manner".

For example, when Comcast acquired NBCUniversal in 2011, the DoJ mandated that Comcast would have to submit to third-party arbitrators over any pricing disputes with other channels, and said that Comcast couldn't have any control over streaming service Hulu (which Comcast owns a stake in).

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