Disney Wins Approval From Department of Justice for $71 Billion Fox Bid

Will have to divest Fox’s regional sports networks

Last Updated: June 27, 2018 @ 10:36 AM

Walt Disney Co. has won approval from the U.S. Department of Justice in its $71.3 billion acquisition of Fox’s film and TV entertainment assets, the company announced Wednesday.

Per the terms of the approval, Disney will be required to divest Fox’s 22 regional sports networks it was set to gain in the acquisition.

“We are pleased that the DOJ concluded that, with the exception of the proposed acquisition of the Fox Sports Regional Networks, the transaction will not harm competition, and that we were able to resolve the limited potential concerns to position us to move forward with this exciting opportunity that will enable us to create even more compelling consumer experiences,” the company said in a statement.

Disney will have at least 90 days from the date of closing the transaction to complete this sale, with the possibility that the DOJ can grant extensions of time up to another 90 days. The consent decree between the DOJ, Disney and Fox is subject to the normal court approval process.

While the divestiture clears the way for Disney’s acquisition of Fox to finally close, the regional sports networks were seen as a way to boost ESPN’s nascent streaming service, ESPN+.

Last week, Disney sweetened its offer to acquire key assets of 21st Century Fox, with a new bid of $38 per share in cash and stock worth $71.3 billion. The increased offer — Disney and Fox initially agreed on a deal worth $52.4 billion in stock — was to counter a competing bid from Comcast, who has also had its eye on Fox.

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

Fox would retain Fox Broadcasting Company, cable stations such as Fox News and Fox Sports 1 and its local TV stations.

Now the question is will Comcast try one more attempt to out-flank Disney. The company declined to comment.