Walt Disney Co.
has reached a $52.4 billion deal to buy much of Rupert Murdoch’s 20th Century Fox entertainment empire. Also, Disney announces that CEO Bob Iger will be with the company through 2021.
LOS ANGELES — Walt Disney Co. has finalized a $52.4-billion deal to buy much of Rupert Murdoch’s entertainment empire, a blockbuster union that would radically transform Hollywood into a land of fewer giants.
The stock deal, which Disney announced Thursday morning, represents Disney’s boldest acquisition yet. If regulators approve it, the Burbank behemoth would take over the prolific 20th Century Fox movie and television studio, Fox’s 22 regional sports channels, cable entertainment brands FX and National Geographic, and Fox’s portfolio of international operations, including a fast-growing pay-TV service in India.
The proposed purchase of much of Murdoch’s 21 Century Fox media company accelerates the trend of media consolidation and would eliminate one of the six major Hollywood film studios. Murdoch would retain control of Fox News Channel, the Fox broadcast network and his newspapers.
Disney would also assume about $14 billion in debt, resulting in a total deal value of about $66 billion. Following the transaction, Fox shareholders would make up about 25 percent of the bulked-up Disney.
Disney also announced Thursday that its chairman and chief executive, Bob Iger, will remain with the company through 2021.
“... We’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings,” Iger said in a statement.
“The deal will also substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world,” he added.
The deal probably won’t close until sometime in 2019, according to Disney, because the company has to secure approvals from regulators in Washington and in other nations.
However, once the transaction is complete, Rupert Murdoch and his family will become the secondlargest shareholders in Disney, with a stake about 4.4 percent.
Audiences for traditional television have been shrinking, in part because viewers have so many options, including big-budget shows available through Netflix and Amazon. Movie attendance also has stagnated.
“This acquisition reflects a changing media landscape,” Iger told analysts Thursday.
Disney plans to launch its own streaming service in 2019 to compete directly with Netflix. This deal gives it a new source of content to feed that service.
“The new Fox is about returning to our roots as a lean, aggressive challenger brand,” said Lachlan Murdoch, who serves as co-chairman of 21st Century Fox.
Disney agreed to pay 21st Century Fox a massive $2.5 billion breakup fee if Disney fails to secure the required approvals.
Disney would gain 22 regional Fox Sports networks, FX 20th Century Fox Television studio and thousands of old movies and television titles.