The U-S Justice Department approved Walt Disney Co.’s proposed $71 billion acquisition of 21st Century Fox Inc. assets on Wednesday, on the condition that Disney divest Fox’s regional sports networks.
According to The Wall Street Journal, the approval gives Disney a leg up in its battle with Comcast Corp. for control of key pieces of Rupert Murdoch’s entertainment empire. The conditions placed by the Justice Department allow Disney to still absorb the parts of Fox that have become key to its long-term strategy, namely the company’s movie and television studio, as well as its stake in the Hulu streaming service.
Disney and Fox’s initial all-stock pact in December, valued at $52.4 billion, was a prelude to a bidding war. Earlier this month, Comcast put in an unsolicited $65 billion all-cash bid for the assets, prompting Disney to boost its offer to a $71.3 billion mix of cash and stock.
The company said it would have 90 days following the closing of the Fox deal to sell the sports networks.
The Wall Street Journal also reported Wednesday that Comcast was exploring partnerships with other companies and private equity partners in case it needs more cash for another round of bidding that takes the price even higher.
Both companies are vying for premier media assets that include the Twentieth Century Fox film and TV studio; a stake in streaming service Hulu; and international businesses such as Star India and European pay TV giant Sky PLC.
Fox News and the Fox broadcast network aren’t for sale and will be spun out into a separate company with other assets.
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