The bidding war that was brewing between Disney and Comcast for assets of 21st Century Fox has come to an end.
Earlier Thursday (July 19), Comcast officially dropped out of the race, saying via a statement: “Comcast does not intend to pursue further the acquisition of Twenty-First Century Fox assets and, instead, will focus on our recommended offer for Sky.”
Further in the release, Brian Roberts (pictured), Comcast chairman and CEO added: “I’d like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company.”
In June, Comcast launched a US$65 billion bid for the Fox assets, which include Fox’s film and television studios; a stable of cable networks including FX, National Geographic and Star India among others; and Fox’s stakes in European satcaster Sky and Hulu as well as a 50% stake in Endemol Shine Group, and a bevy of regional sports networks. At that time, Disney’s offer, made in December, stood at $52.4 billion. Six days after the Comcast bid became official, Disney upped its bid to $71.3 billion.
The battle now moves to the acquisition of Sky. Fox has recently received UK government clearance to purchase the 61% of the company it already doesn’t own, provided that it divest Sky News to Disney or to “an alternative suitable buyer, with an agreement to ensure that it is funded for at least 10 years.” Comcast is angling to be that alternative buyer, launching a $31 billion bid for Sky in May and upping that to $34 billion after Fox upped its original bid to £24.5 billion, or approximately $32.4 billion.
Sky, with its 23 million paying subscribers across Europe, has been called the “crown jewel” of the deal by Disney’s Iger, and having it under the Disney umbrella would go some way towards fulfilling the company’s ambitions of building a robust direct-to-consumer platform to rival Netflix. If Comcast succeeds in buying Sky, it will effectively become the world’s biggest pay TV provider, with close to 52 million international subscribers.
Comcast had stepped up its bids for Sky and Fox after the judicial greenlight was given for AT&T’s acquisition of Time Warner in mid-June. (http://realscreen.com/2018/06/12/judge-approves-att-time-warner-deal/) But while that move prompted financial analysts and media-watchers to predict a summer of even more M&A activity, the U.S. government has moved to appeal the decision by U.S. district court judge Richard Leon, stating that the court “committed multiple errors” with the ruling.