Disney has officially transformed itself into a media powerhouse with the news on Thursday that the company has acquired most of Fox in a $54.2 billion deal.
It was announced at the same time that due to the sale, Disney’s longtime CEO Bob Iger would be staying on through 2021 in his current position, marking the third time he has extended his contract.
That move officially killed long-circulating rumors that Iger was looking to challenge President Trump in the 2020 election as the Democratic nominee.
The all-stock deal valued 21st Century Fox shares at around $40, up from the $32.75 they were trading at on Wednesday when the market closed.
News of the sale sent stocks prices for both companies down however in pre-market trading, with Disney share prices dropping two percent and Fox going down over three percent.
Eye of the Iger: The Walt Disney Co. has acquired most of 21st Century Fox in a $54.2 billion all-stock deal in which they paid approximately $40-per-share (Bob Iger and Rupert Murdoch above in London in a file photo)
Disney picked up Fox networks including FX and National Geographic in the sale as well as Star India’s TV channels and a 39 percent stake in European satellite provider Sky Plc.
The Walt Disney Co. will also double its ownership of Hulu to 60 per cent after obtaining Fox’s stake and take control of the movie studio.
The deal was said to have appealed to 21st Century Fox as they look to streamline their operation and focus on selected television properties including Fox News, Fox Sports and all local news affiliates in addition to their broadcast network.
This move comes amidst reports that Rupert Murdoch, 86, if finally ready to hand the company over to his sons Lachlan and James after a tumultuous year that saw Fox News part ways with its creator Roger Ailes and biggest star Bill O’Reilly following multiple reports of sexual harassment or assault from staffers.
It is still not known if Murdoch, who is currently the Executive Co-Chairman at 21st Century Fox, will maintain a role inside the company or if he would take some time off to celebrate being newly wed for the fourth time to supermodel wife Jerry Hall.
James on the other hand is expected to snag a top spot at Disney and be in line to possibly succeed Bob Iger when he steps down as CEO of the company.
The two men are also now key shareholders of Disney stock, just one month after shares of their company had plummeted to a $25 low.
Disney was not be able to acquire the broadcast channel or Fox Sports even if they had wanted to in the sale since the company already owns a broadcast channel (ABC) and sports network (ESPN).
Walt Disney Co. now controls 21st Century’s film studio and television channels including FX, FXX, National Geographic along with international stations such as Star and Sky.
Under Iger’s reign, Disney has acquired Pixar for $7.4 billion in 2006; Marvel for $4 billion in 2009, Lucasfilm Ltd for $4 million in 2013 and even managed to regain the rights to the very first character ever illustrated by the company’s namesake founder.
Oswald the Lucky Rabbit came home to Disney after Iger agreed to turnover a legendary character of its own by releasing Al Michaels from his ABC Sports contract so he could move to NBC.
Disney has already managed to recoup their investment on all those sales.
Fox News alert: 21st Century Fox shares prices dropped over three percent after the sale was announced
Tower of terror: Shares of Disney were down two percent in premarket trading
Iger’s time at Disney was thought to be coming to an end however as the longtime executive and current Chairman of the Board announced a few months ago that he would be stepping down in 2019 after twice extending his contract with the company.
The search for an heir apparent had proven problematic in the past however, so there was always a chance the 66-year-old media magnate would stay on at the company in some position.
Not to be outdone, 21st Century Fox also shelled out some big bucks recently, settling a sexual harassment lawsuit with Gretchen Carlson for $20 milllion and riding disgraced Fox News figureheads Ailes and O’Reilly with severance packages valued at $42 million and $25 million respectively after the men were fired from the company.
Comcast had also been considering a deal to purchase Fox, but announced on Monday they were pulling out of talks.
‘The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before,’ said Iger on Thursday.
‘We’re honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building, and we’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings.
‘The deal will also substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world.’
Murdoch also released a statement after news of the sale was made official.
‘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,’ said the octogenarian.
‘Furthermore, I’m convinced that this combination, under Bob Iger’s leadership, will be one of the greatest companies in the world. I’m grateful and encouraged that Bob has agreed to stay on, and is committed to succeeding with a combined team that is second to none.’