Rupert Murdoch has denied he is “retreating” after striking a deal to sell a vast swathe of his media empire to the Walt Disney Company for $66bn (£49.1bn).
Disney today said it would acquire most of Mr Murdoch's 21st Century Fox business, including its stake in UK broadcaster Sky and the 20th Century Fox film studio, in an all-share deal that will hand Fox shareholders 25pc of the combined company.
Mr Murdoch and his family will be left holding Fox’s Broadcasting network and channels including Fox News and Fox Business, which will be spun off into a new company, New Fox.
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Mr Murdoch told investors today: “I know a lot of you are wondering, why did the Murdochs come to such a momentous decision? Are we retreating? Absolutely not. We are pivoting at a pivotal moment.”
Disney expects to create $2bn in cost savings from the deal, which will strengthen its hand as it faces up to competition from online tech giants Netflix and Amazon.
Its chief executive Bob Iger told investors the deal would bring together “some of the world’s iconic entertainment franchises, along with some truly extraordinary creative talent and broad international presence" to help meet the changing demands of consumers.
The enlarged company will control a huge chunk of the world’s most popular entertainment franchises, from Star Wars to the X-Men, Toy Story and Avatar.
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Disney said the deal, which is likely to take 12 to 18 months to close, was not contingent on Fox successfully completing its planned takeover of the 61pc of Sky it does not currently own. That deal is awaiting regulatory approval and is expected to be approved or rejected early next year.
It had been reported that Mr Murdoch’s son James, currently chief executive of Fox and chairman of Sky, could be handed a senior role at Disney after the deal closed.
Mr Iger, who will also extend his contract to lead Disney until 2021, said: “[James] will be integral to helping us integrate these companies over the next number of months and during that period of time he and I will continue to discuss whether there’s a role for him here or not.”
Disney's takeover is subject to approval by shareholders of both businesses, and could also face opposition from competition regulators. The US justice department is currently suing the telecoms firm AT&T in a bid to prevent its takeover of media giant TimeWarner.
Mr Iger said he expected the deal to attract the attention of regulators but that “if they look at it from a consumer point of view, they should quickly conclude that the aim of this combination is to create more high-quality products for consumers around the world”.
The brands Disney will acquire include FX Networks, National Geographic, Fox Sports, Star India and Fox’s stake in production company Endemol Shine. It will also take on majority ownership of online streaming service Hulu, doubling its shareholding with the acquisition of Fox’s 30pc stake.
Mr Murdoch said: “We are extremely proud of all that we have built at 21st Century Fox, and I firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace in what is an exciting and dynamic industry.”
Mr Murdoch and his family also own publishing giant News Corporation, whose brands include the Wall Street Journal, The Times, The Sun and HarperCollins.