https://www.wsj.com/articles/shareholders-approve-disneys-acquisition-of-fox-entertainment-assets-1532701190
Shareholders Approve Walt Disney Deal for 21st Century Fox Assets
The deal is key to Disney's plan to launch its own streaming service
Under the deal, Disney would absorb Fox's film studio, responsible for franchises such as 'Avatar.' The 2009 film was a blockbuster.
Photo: 20th Century Fox/Associated Press
Erich Schwartzel
@erichschwartzel
erich.schwartzel@wsj.com
Keach Hagey
@keachhagey
keach.hagey
Keach.Hagey@wsj.com
Shareholders of Walt Disney Co. DIS -2.25% and 21st Century Fox FOX 2.33% approved the $71 billion deal between the two companies on Friday, clearing another hurdle for a deal that will rattle the media and entertainment landscape and could inspire a wave of similar tie-ups.
If the deal is completed, Disney will absorb Fox's storied film and television studios, responsible for franchises like "Avatar" and "The Simpsons," as well as stakes in the Sky PLC pay-television company and the Hulu video-streaming service.
From AT&T and Time Warner to the hot pursuit of 21st Century Fox and Sky, media mergers are in full swing. Why now? WSJ's Amol Sharma answers all your questions about the forces driving media deals. Photo: Getty Images
Disney and Fox shareholders voiced their support for the deal in meetings in Manhattan. The short formal gatherings were a noncontroversial proceeding in a merger that has generated considerable drama in the past six months.
At Fox's sparsely attended shareholder meeting at the New York Hilton's downstairs conference room, the mood was wistful. Although Fox Executive Chairman Rupert Murdoch himself wasn't in attendance, one Fox shareholder, Philip Berman, stood up and declared, "Finally, Rupert's dream is complete."
Disney's meeting, presided over by the company's general counsel, Alan Braverman, lasted less than 10 minutes with only a handful of procedural questions from shareholders. The vote faced essentially no pushback from Disney shareholders, with 99% of the shares voted approving the deal.
Shares of Disney fell 0.5% to $112.92 Friday, while Fox shares slipped 0.3% to $45.26.
Disney still has several boxes to check before the deal is closed. Though the Justice Department approved the acquisition last month, Disney is waiting for approvals from more than a dozen international territories, including the European Union and China. The Justice Department's approval came on the condition that Disney divest itself of Fox regional sports networks that compete with its own ESPN.
When Disney announced its bid to acquire Fox in December, the offer was valued at $52.4 billion in Disney stock. Then, in June, Comcast Corp. bid $65 billion in cash for the assets, forcing Disney to counter with a $71 billion mix of cash and stock.
Comcast dropped out of the Fox chase this month. "We thought we couldn't build enough shareholder value" at the price needed to win the war, CEO Brian Roberts said on an earnings call Thursday. Mr. Roberts said his company is focused on winning its separate pursuit of Sky, which began during the broader Disney-Comcast contest.
The fate of the pay-TV operator remains the biggest question. Fox wants to consolidate its ownership of Sky ahead of the Disney deal, but Comcast currently leads the bidding at $34 billion.
Disney executives, who have the final say on whether Fox continues its pursuit of the remainder of Sky, have indicated they will resist a "split the baby" scenario that cedes it to Comcast. Resolving the Sky portion of the deal with Comcast isn't a condition of the deal closing.
Even without Sky, acquiring Fox would make Disney—already the world's largest entertainment company—a significantly bigger force at a time of unprecedented box-office success for the company.
But Disney has had to learn quickly how to navigate a media landscape redefined by newer tech rivals like Netflix Inc. and Amazon.com Inc. In the past several years, direct-to-consumer offerings like Netflix have reoriented entertainment customers away from movie theaters and traditional cable bundles, which drove Disney's ESPN division to billion in profits.
Disney plans to use the Fox library and majority ownership of Hulu to bolster its own plans to launch a streaming service in late 2019, piping the company's "Star Wars" and Marvel Entertainment programming straight into the home.
Disney CEO Bob Iger made the direct-to-consumer strategy his core focus at the company in 2017, and then decided to pursue the Fox acquisition because it would bolster that effort, according to people familiar with his thinking. Though Mr. Iger built Disney through acquisitions like Pixar Animation Studios and Lucasfilm Ltd., the Fox merger is his priciest deal by far.
With the deal one step closer to completion, the rest of Hollywood is figuring out how to compete against the newly formed monolith.
Netflix has announced it will spend more than $8 billion on programming this year, a way for it to plug some of the hole left by the Disney-Fox movies and television shows that will leave the service when Disney's competing service launches. AT&T Inc.'s acquisition of Time Warner Inc. has many media executives expecting other platform providers to try to marry distribution with production.
Write to Erich Schwartzel at erich.schwartzel@wsj.com and Keach Hagey at keach.hagey@wsj.com
Appeared in the July 28, 2018, print edition as 'Disney's Fox Deal Wins Approval.'
Show Conversation Hide Conversation (13)