Media proprietor Rupert Murdoch has agreed to sell a number of key 21st Century Fox assets to Walt Disney in an historic US52.4 billion deal that will provide the studio with greater scale to take on video streamers and make the Murdoch family Disney’s biggest shareholder.
Disney will acquire the 20th Century Fox film and television studio and its international cable TV businesses. This means that Disney will soon own the rights to several large film and television series, including The Simpsons, American Horror Story, Avatar and superhero franchises Deadpool and X-men.
After the closure of the deal, the Murdochs will go from having a 17 per cent share in 21st Century Fox to a five per cent share in Disney. It also means Fox’s current shareholders will own about 25 per cent of Disney’s New York-listed shares.
The deal will expand the commercial interests of Disney, giving it greater ability to compete with Netflix and Amazon within the digital streaming space, as the media landscape continues to change.
Following the announcement on Thursday (local time), Mr Murdoch said: “Today is a momentous occasion for me, investors and thousands of colleagues who have joined us over the years in building and nurturing what has become 21st Century Fox.
“The world of media is obviously undergoing rapid change.
“New technologies, new competitors, shifting consumer preferences have redrawn the whole media map.”
Mr Murdoch will retain the 21st Century Fox assets of the Fox television stations and network, Fox News Channel, Fox Sports One, Fox Sports Two and Big Ten Network, which is part of the web of US and international sports networks.
These businesses will be listed as a separate company for shareholders, alongside its sister company, News Corporation.
Disney announced earlier this year its plans to launch its own streaming service in 2019 to rival Netflix and Amazon Prime. Through the 21st Century deal, the amount of content Disney will be able to offer has expanded exponentially, with commentators already predicting the new platform will be a hit with consumers on launch.
Analysts have speculated that the new, slimmed-down 21st Century Fox would merge with News Corp, but Mr Murdoch has ruled this out in the short- to medium-term.
When asked in an interview on Fox Business whether he plans such a recombination, Mr Murdoch said: “I don’t know. Ideally, yes, but I think that’s years away. We’ll have to think about that.”
This leaves a cloud over the position of Mr Murdoch’s younger son, James, the current chief executive of 21st Century Fox.
Amid speculation James would be eventually be offered the reins at Disney, current chairman and chief executive Bob Iger has been asked to remain in both positions until 2021. Mr Iger said James would assist in the merger of the Fox assets and the two would “continue to discuss whether there is a role for him or not” at Disney when the deal closes in 12-18 months.