Comcast Drops Bid for Fox Assets to Focus on Sky Instead

Clears the way for Disney to acquire Fox assets

Last Updated: July 19, 2018 @ 8:22 AM

Comcast said on Thursday that it will not make another attempt to pry major 21st Century Fox assets away from Disney, choosing instead to focus on acquiring British pay-TV giant Sky Plc.

“Comcast does not intend to pursue further the acquisition of the Twenty-First Century Fox assets and, instead, will focus on our recommended offer for Sky,” the company said in a statement.

The move clears the way for Disney to acquire the film and TV studios, among other assets, from Fox. “Our incredible enthusiasm for this acquisition and the value it will create has continued to grow as we’ve come to know 21st Century Fox’s stellar array of talent and assets,” said Disney CEO Bob Iger in a statement. “We’re extremely pleased with today’s news, and our focus now is on completing the regulatory process and ultimately moving toward integrating our businesses.”

The two companies had initially agreed to a $54.2 billion deal in December, before Comcast came in with an “unsolicited” offer of $65 billion in June. Disney then sweetened its prior bid to $71.3 billion, which Fox again accepted over Comcast.

“I’d like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company,” Comcast CEO Brian Roberts said in a statement.

Many industry experts had widely expected Comcast to make another bid, but two important developments over the past few weeks may have changed Comcast’s thinking.

First, the U.S. Department of Justice approved the deal between Disney and Fox, provided that Disney sell off the 22 regional sports networks it will gain in the sale. That meant that any new Comcast bid would have to be a “Godfather”-type offer to force Fox to reconsider.

The Department of Justice then filed an appeal of a federal judge’s approval of the $85.4 billion merger between AT&T and Time Warner. Even though the its appeal has a long shot of overturning AT&T-Time Warner deal, it could have lessened the likelihood that Comcast would gain regulatory clearance for its proposed deal for Fox.

Fox has set a July 27 shareholder meeting to vote on the Disney deal. If either Comcast’s or Fox’s acquisition of Sky is not completed by then, Disney would be forced to make a minimum bid of £14 a share for the 61 percent of Sky that Fox doesn’t own. That would be less than the £14.75 per share that Comcast offered last week.

Both companies were vying for a portfolio that includes the Fox film and TV studios, U.S. cable networks including FX and National Geographic, international properties including Sky and Star India as well as Fox’s one-third stake in the streaming service Hulu.

Trey Williams contributed to this report.