For several months, Disney has been in lengthy discussions to acquire the 21stCentury Fox. But today, Comcast announced that it will purchase Fox in cash, a move that will thwart the efforts of Disney that plans to pay in all-stock. The deal will not impact on Fox’s other services such as the news and sports events.
Generally, any acquisition offer is lucrative if it attracts all-cash and a premium to the stipulated value of the assets compared to the all-stock offer. The shareholder of Fox would opt for the deal that instantly brings returns in form of cash to eliminate the risks associated with all-stock options.
Disney intends to acquire Fox to enhance its provisions and position its corporate brand name strategically in the marketplace as it prepares for a grand launch of streaming and other entertainment services in the near future.
Fox is currently facing the challenge of making the final decision by selecting the company that suits them well. Both Disney and Fox shareholders are expected to meet soon to vote on whether the offer is viable for both parties.
Disney had signed the agreement in late December last year to purchase a section of the Fox property at $52.4 billion all-stock buyout. The company also intends to expand its assets to have a competitive advantage over other giant firms in the entertainment industry.
Mergers Are Taking Over The Industry
In the recent past, there have been major mergers in the industry especially between tech and media firms and companies are angrily taking over the small rivals. Comcast, the leading cable operator in the US, owns both TV and movie producer, NBC Universal.
If the deal closes successfully, Comcast’s shares will increase drastically particularly for Fox’s Hulu unit. The joint efforts will allow Comcast to expand its film and video streaming.
In the recent past, Comcast and Fox failed to make a deal on the previous acquisition over the existing antitrust concerns. However, today, the Comcast’s seems to understand the urgent needs of the company that would prompt Fox to alter their plans with Disney. If it’s succeeds, Comcast will acquire some parts of Fox without the need to fulfill the regulatory requirements.
Entertainment sector continues to advance due to the rapid developments in technology. Today, each company is searching for ways to own content and the latest drama between Disney and Comcast is basically on the power of content.