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Disney Closes Acquisition of 21st Century Fox

Disney’s historic $71.3 billion acquisition of 21st Century Fox creates an unprecedented collection of content and talent for the Mouse House.

Updated art featuring both Disney and Fox characters has been added to the home page of the official Disney website. Image: The Walt Disney Company.

On Tuesday night at midnight, The Walt Disney company officially took over the reins of the bulk of 21st Century Fox’s feature film production businesses and television creative units, ending a two-year saga that included a bidding war between Disney and Comcast for the company headed up by Robert Murdoch.

The closing of the historic acquisition was announced in a press release from Disney confirming that the $71.3 billion deal which now grants it ownership of Fox’s film and TV assets -- including Twentieth Century Fox, Fox Searchlight Pictures, Fox 2000 Pictures, Fox Family and Fox Animation; Fox’s TV’s creative units, Twentieth Century Fox Television, FX Productions and Fox21, FX Networks, National Geographic Partners, Fox Networks Group International and Star India, as well as Fox’s 30 percent stake in Hulu -- is complete.

“This is an extraordinary and historic moment for us -- one that will create significant long-term value for our company and our shareholders,” Disney chairman and CEO Robert A. Iger said in a statement. “Combining Disney’s and 21st Century Fox’s wealth of creative content and proven talent creates the preeminent global entertainment company, well positioned to lead in an incredibly dynamic and transformative era.”

In a memo to staffers obtained by The Hollywood Reporter, Iger wrote that now that the deal is actually complete and in action, the hard work can now begin in earnest:

“I wish I could tell you that the hardest part is behind us; that closing the deal was the finish line, rather than just the next milestone. What lies ahead is the challenging work of uniting our businesses to create a dynamic, global entertainment company with the content, the platforms, and the reach to deliver industry-defining experiences that will engage consumers around the world for generations to come.
 
We’ve spent the last year exploring the new opportunities and synergies generated by bringing our two legendary companies together. Leaders across both organizations have worked closely together to understand how to best unlock this potential and unleash innovation and creativity to generate long-term growth. We’re confident in our integration strategy and in our ability to execute it effectively; and we’re inspired and energized by the new possibilities.”

Hinting at future layoffs, Iger also noted that Disney is still evaluating which areas of the company will be most affected by the merger:

“Our integration process will be an evolution, with some businesses impacted more than others. We’ve made many critical decisions already, but some areas still require further evaluation. We may not have answers to all of your questions at this moment, but we understand how vital information is, and we’re committed to moving as quickly as possible to provide clarity regarding how your role may be impacted.”

Read the full press release below:

Disney and 21st Century Fox Announce per Share Value in Connection with $71 Billion Acquisition

Acquisition of 21st Century Fox will become effective at 12:02 a.m. Eastern Time tomorrow, March 20, 2019

Unprecedented collection of high-quality creative content, stellar talent and cutting-edge technologies will enable Disney to accelerate its direct-to-consumer strategy and expand its global presence

BURBANK, Calif. and NEW YORK, New York, March 19, 2019 – The Walt Disney Company (NYSE:DIS) and Twenty-First Century Fox, Inc. (“21CF”) (NASDAQ: TFCFA, TFCF), in connection with Disney’s acquisition of 21CF (the “Acquisition”), announced today that the per share value of the Merger Consideration (as defined below) has been calculated in accordance with the Merger Agreement (as defined below) to be $51.572626 (the “Per Share Value”. See footnote1). The Acquisition will become effective at 12:02 a.m. Eastern Time tomorrow, March 20, 2019.

At the effective time of the Acquisition, each share of 21CF common stock will be exchanged for $51.572626 in cash (the “Cash Consideration”) or 0.4517 shares of common stock of TWDC Holdco 613 Corp., the holding company that will own both Disney and 21CF following the Acquisition (“New Disney”) (the “Stock Consideration”, and together with the Cash Consideration, the ”Merger Consideration”), subject to election, proration and adjustment procedures set forth in the Amended and Restated Agreement and Plan of Merger(the “Merger Agreement”), dated as of June 20, 2018, by and among 21CF, Disney, New Disney, and certain of Disney’s other subsidiaries. The number of shares of New Disney common stock comprising the Stock Consideration was determined by dividing the Per Share Value by $114.1801, which was the volume weighted average trading price of a share of Disney common stock on the New York Stock Exchange over the fifteen consecutive trading day period ending on (and including) March 15, 2019.

“This is an extraordinary and historic moment for us—one that will create significant long-term value for our company and our shareholders,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “Combining Disney’s and 21st Century Fox’s wealth of creative content and proven talent creates the preeminent global entertainment company, well positioned to lead in an incredibly dynamic and transformative era.”

The acquisition of 21st Century Fox’s iconic collection of businesses and franchises will allow Disney to provide more appealing high-quality content and entertainment options to meet growing consumer demand; increase its international footprint; and expand its direct-to-consumer offerings, which include ESPN+ for sports fans, the highly-anticipated Disney+ streaming video-on-demand service launching in late 2019; and Disney and 21st Century Fox’s combined ownership stake in Hulu.

The acquisition includes 21st Century Fox’s renowned film production businesses, including Twentieth Century Fox, Fox Searchlight Pictures, Fox 2000 Pictures, Fox Family and Fox Animation; Fox’s television creative units, Twentieth Century Fox Television, FX Productions and Fox21; FX Networks; National Geographic Partners; Fox Networks Group International; Star India; and Fox’s interests in Hulu, Tata Sky and Endemol Shine Group. Disney and 21st Century Fox entered into a consent decree with the U.S. Department of Justice last year under which Disney will divest 21st Century Fox’s Regional Sports Networks.

Earlier today, 21st Century Fox completed the spin-off of a portfolio of 21st Century Fox’s 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 and liabilities, into Fox Corporation.

Disney is also acquiring approximately $19.8 billion of cash and assuming approximately $19.2 billion of debt of 21st Century Fox in the acquisition. The acquisition price implies a total equity value of approximately $71 billion and a total transaction value of approximately $71 billion.

The acquisition is expected to be accretive to Disney earnings per share before the impact of purchase accounting for the second fiscal year after the close of the transaction, and to yield at least $2 billion in cost synergies by 2021 from operating efficiencies realized through the combination of businesses.


1On March 19, 2019, 21CF distributed to holders of shares of 21CF common stock (other than holders that are subsidiaries of 21CF) all of the issued and outstanding common stock of Fox Corporation (“FOX”) on a pro rata basis (the “Distribution”). As a result of the Distribution, 0.263183 of each share of 21CF common stock outstanding immediately prior to the Distribution was exchanged for 1/3 of one share of FOX common stock of the same class, and holders continued to hold the remaining 0.736817 of each share of 21CF common stock. The 0.736817 of each share of 21CF common stock remaining outstanding following the Distribution will be exchanged for the amount of consideration in the Acquisition that a whole share of 21CF common stock would have been exchanged for before giving effect to the Distribution. To accomplish this, the consideration that holders will receive in the Acquisition is automatically adjusted pursuant to the Merger Agreement to take the Distribution into account by multiplying the value of such consideration ($38.00) by the Distribution Adjustment Multiple (1.357190).

About Disney

Disney, together with its subsidiaries, is a diversified worldwide entertainment company with operations in four business segments: Media Networks; Parks, Experiences and Products; Studio Entertainment; and Direct-to-Consumer and International. Disney is a Dow 30 company and had annual revenues of $59.4 billion in its Fiscal Year 2018. For more information about Disney, please visit www.thewaltdisneycompany.com.

Jennifer Wolfe's picture

Formerly Editor-in-Chief of Animation World Network, Jennifer Wolfe has worked in the Media & Entertainment industry as a writer and PR professional since 2003.

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