The Justice Department approved Disney’s bid for Fox on Wednesday. Although the deal is not finalized yet, this is a big step for the companies to successfully merge.
The acquisition still needs approval from a federal judge and Fox shareholders, but considering the ease of the AT&T-Warner acquisition and the anticipated payday for shareholders, neither step should create a major obstacle.
Disney recently upped their bid for Fox, which now values at $71.3 billion. Although Comcast could still counter with another bid increase, this is unlikely for multiple reasons. First, Comcast would have to take on a mountain of debt to be able to acquire Fox, which could ultimately lead to the collapse of the company. Secondly, this prefers a merger with Disney because of its ease in the court system. And finally, this would create a nearly invincible media creation duo.
If the deal passes the next two steps, Disney will gain the rights to channels like FX and National Geographic. It will also obtain their movie studios and, the dark horse, streaming service Hulu. In fact, the only parts of Fox that the Justice Department forbade were its regional sports networks. Disney will have to sell off the 22 networks in order to fully acquire Fox.
Assistant Attorney General Makan Delrahim had this to say about the ruling:
American consumers have benefitted from head-to-head competition between Disney and Fox’s cable sports programming that ultimately has prevented cable television subscription prices from rising even higher. Today’s settlement will ensure that sports programming competition is preserved in the local markets where they compete for cable and satellite distribution.
This deal would be monumental for the media industry. In fact, it may even be a bigger victory than AT&T-Warner. If the deal advances past the next two steps, the expansion of Disney will be very interesting to watch.
Featured image via Pixabay/rgrivas10