The Walt Disney Company said on Thursday that it had reached a deal to buy most of the assets of 21st Century Fox, the conglomerate controlled by Rupert Murdoch, in an all-stock transaction valued at roughly $52.4 billion, New York Times reports. The deal includes Fox’s 39% stake in satellite broadcaster Sky, and 20th Century Fox film studio, Disney announced.
While the agreement is subject to the approval of antitrust regulators — and the Justice Department recently moved to block a big media company from becoming even bigger — the once unthinkable acquisition promises to reshape Hollywood and Silicon Valley.
It is the biggest counterattack from a traditional media company against the tech giants that have aggressively moved into the entertainment business. Disney now has enough muscle to become a true competitor to Netflix, Apple, Amazon, Google and Facebook in the fast-growing realm of online video.
At the same time, the agreement means that one of moviedom’s most celebrated studios, 20th Century Fox, will be downsized, with some operations folded into Walt Disney Studios or refocused to make films designed for online distribution. Founded in 1935, the Fox studio championed Marilyn Monroe, produced classics like “The Sound of Music,” released the first “Star Wars” movie and, more recently, turned “Avatar” into the biggest ticket-seller of all time.
But lately, like most of Hollywood, 20th Century Fox has struggled to keep pace with the changing way younger audiences view content — namely on an internet-connected device. Disney said it expected the acquisition to yield “at least” $2 billion in total cost savings.
Disney also will buy Fox's stake in the Hulu video streaming service, giving it majority control of a competitor to Netflix. Hulu is also partially owned by Comcast and Time Warner.
Paolo Pescatore, an analyst with CCS Insight, said: "The move will firmly establish Disney as one of the leading media companies in the world and puts it in a great position to compete head on with the threat posed by the web providers such as Amazon and Facebook.
