FOX-DISNEY DEAL: CCI APPROVES TAKEOVER OF MURDOCH’S FIRM

The acquisition of Rupert Murdoch’s 21st Century Fox by The Walt Disney Company is a step closer to fruition with the merger of Star India and related assets (Fox Star Studios and National Geographic channels) getting the Competition Commission of India’s (CCI’s) approval.

The Disney-Fox deal got the approval of the Department of Justice in the US in June this year, while shareholders of both the companies approved the deal in July. Sources close to the development said India was among the three crucial markets outside the US and the approval by the CCI meant that all of Star India assets and related companies could be acquired by Disney India in principle. The deal, however, will come into effect only after all the jurisdictions that the companies operate in globally get the required approvals. “There are close to 20 jurisdictions that need individual approvals. DoJ approval in the US and CCI approval in India are big milestones for the deal. Other important markets include Latin America and the EU,” said a person in the know.

In December last year, Disney announced a definitive agreement to acquire select assets of 21st Century Fox (21CF) for $52.4 billion.

In India, these included the entertainment channels, the sports broadcast business, over-the-top platform Hotstar and Star India’s stake in DTH platform Tata Sky along with the film and infotainment business.

In June this year, Comcast placed a counter offer of $65 billion to acquire the assets, in response to which Disney placed a counter bid of $71.3 billion. Comcast bowed out of the race in July, leaving Disney free to acquire the 21CF assets as announced in December last year. In India, the move will make Disney, currently a small player known primarily for its kids’ channels and distributing Hollywood films, the largest media and entertainment broadcaster, with more than $1.3 billion of additional India revenue.

It will give Disney access to cricket rights like the Indian Premier League (IPL) and the Board of Control for Cricket in India (BCCI), giving its sports broadcast plans a boost. Currently, Disney’s presence in sports broadcast is through a joint venture with Sony Pictures Network India (SPN), with standard and high-definition variants of the channel Sony ESPN forming part of the SPN sports channel bouquet.

There is no clarity on what will happen to this venture once the Star-Disney deal is through in India. Those close to Sony say the network has taken a waitand-watch approach, but with CCI approval in place, some resolution on the matter will be discussed soon. With this deal, Disney will also be able to re-enter Bollywood production. The company entered the business mainly through its acquisition of Ronnie Screwvala’s UTV Software, which included the movie studio UTV Productions, back in 2012. After nearly five years of operations, Disney decided to pull out of the Bollywood business in 2016, and has since then focused on Hollywood movie distribution.

The move will propel Disney, currently a small player in India known primarily for its kids’ channels and distribution of Hollywood films, as the largest media & entertainment broadcaster here