NEW YORK • Walt Disney yesterday agreed to buy film, TV and international assets from media tycoon Rupert Murdoch's 21st Century Fox for US$52.4 billion (S$71 billion) as Disney seeks greater scale to tackle growing competition from Netflix and Amazon.com.
Under the terms of the all-stock deal, Disney acquires significant assets from Fox, including the studios that produce the blockbuster Marvel superhero movies and the Avatar franchise, as well as hit TV shows such as The Simpsons.
Fox shareholders will receive 0.2745 Disney shares for each share held. This translates to a value of US$29.50 per share for the assets that Disney is buying, Reuters calculations based on Disney's Wednesday market closing price show.
Immediately prior to the acquisition, Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders.
The deal ends more than half a century of expansion by Mr Murdoch, 86, who turned a single Australian newspaper he inherited from his father at the age of 21 into one of the world's most important global news and film conglomerates.
Disney chief executive Bob Iger, 66, will extend his tenure through the end of 2021 to oversee the integration of the Fox businesses.
He has already postponed his retirement from Disney three times, saying in March he was committed to leaving the company in July 2019.
Disney will also assume about US$13.7 billion of Fox's net debt in the deal.
Through Fox's stake in the Hulu video streaming service, Disney will assume majority control of one of Netflix's main competitors. Hulu is also partially owned by Comcast Corp and Time Warner.
Disney has been struggling to bolster its TV business as cancellation of cable subscriptions is pressuring its biggest network, sports channel ESPN.
The Fox deal brings marquee franchises inside the Mouse House, on top of Mr Iger's previous purchases, including Pixar Animation Studios, Marvel Entertainment and Star Wars producer Lucasfilm.
The deal diversifies Disney's revenue as US cable television subscribers decline.
Fox's Star business in India, for example, is projected to earn US$1 billion before interest, taxes, depreciation and amortisation by 2020, Fox executive chairman Lachlan Murdoch said at a Business Insider conference last month.
It is not clear how the deal will be treated by US anti-trust regulators, given that it looks set to reduce competition among movie studios.