Fox and Disney Shareholders Vote to Approve $71.3 Billion Merger

Disney will take ownership of Fox’s Twentieth Century Fox film and TV studios

Bob Iger and Rupert Murdoch

Shareholders for both The Walt Disney Co. and those for 21st Century Fox voted on Friday to approve the $71.3 billion acquisition of Fox’s film and TV entertainment assets by Disney.

The deal was approved at shareholder meetings at both companies on Friday morning, which were live-streamed. The vote all but seals the lid on a deal that was nearly hijacked by Comcast Corp. when CEO Brian Roberts offered Fox $65 billion for the same assets, forcing Disney to up its initial bid to the now $71.3 billion.

“We’re incredibly pleased that shareholders of both companies have granted approval for us to move forward, and are confident in our ability to create significant long-term value through this acquisition of Fox’s premier assets,” Disney CEO Bob Iger, said in a statement following the shareholder vote. “We remain grateful to Rupert Murdoch and to the rest of the 21st Century Fox board for entrusting us with the future of these extraordinary businesses, and look forward to welcoming 21st Century Fox’s stellar talent to Disney and ultimately integrating our businesses to provide consumers around the world with more appealing content and entertainment options.”

The deal is expected to close in the first half of 2019.

With the deal wrapped up, Disney will take over ownership of Fox’s Twentieth Century Fox film and TV studios, as well as certain cable and international television businesses, according to the companies’ joint merger proposal to shareholders.

That should help strengthen Disney’s content offering even more as it prepares to launch its standalone streaming service next year. And fanboys can rejoice in Marvel properties, such as the X-Men and Fantastic Four being in a position to join the MCU.

Fox, on the other hand, will hold on to a portfolio of news, sports and broadcast businesses, including the Fox News Channel, Fox Business Network, Fox Broadcasting Company, Fox Sports, Fox Television Stations Group, and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network, and certain other assets.

“Combining the 21CF businesses with Disney and establishing new ‘Fox’ will unlock significant value for our shareholders,” Fox Executive Chairman Rupert Murdoch said in a statement after the vote. “We are grateful to our shareholders for approving this transaction. I want to thank all of our executives and colleagues for their enormous contributions in building 21st Century Fox over the past decades. With their help, we expect the enlarged Disney and new ‘Fox’ companies will be pre-eminent in the entertainment and media industries.”

As part of the merger agreement, Fox stockholders can elect to receive $38 per share in either cash or shares of New Disney, the new holding company that will become the parent of both Disney and 21st Century Fox. The overall mix of consideration paid to Fox stockholders will be approximately 50 percent cash and 50 percent stock, according to the agreement.

The stock consideration is subject to a collar, which will ensure that 21st Century Fox stockholders will receive consideration equal to $38 in value if the average price of Disney stock at closing is between $93.53 and $114.32. Disney expects to pay a total of roughly $35.7 billion in cash and issue about 343 million New Disney shares to Fox stockholders. As a result, current Fox stockholders will own a 17-to-20 percent stake in New Disney on a pro forma basis.

Fox and Disney had originally agreed on a $54.2 billion all-stock deal before Comcast’s unsolicited bid. But Roberts and Comcast dropped out of the running for Fox’s assets last week, opting instead to focus on its battle with Fox to acquire U.K. broadcaster Sky.

“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,” Roberts said in a statement at the time.

There were concerns from Fox and industry experts that a combination with Comcast would face tougher regulatory scrutiny.

The U.S. Department of Justice has already approved Disney’s acquisition, provided the media and entertainment company divest the 22 regional sports networks it was set to gain in the deal.