21st Century Fox to spin off Fox
Broadcasting network and stations, Fox News, Fox Business, FS1, FS2
and Big Ten Network to its shareholders
- Acquisition complements and enhances
The Walt Disney Company’s ability to provide consumers around the
world with more appealing content and entertainment options
- Transaction to include 21st Century
Fox’s film and television studios, cable entertainment networks and
international TV businesses
- Popular entertainment properties
including X-Men, Avatar, The Simpsons, FX Networks and National
Geographic to join Disney’s portfolio
- Expands Disney’s direct-to-consumer
offerings with addition of 21st Century Fox’s entertainment
content, capabilities in the Americas, Europe and Asia; Hulu stake
becomes a controlling interest
- Addition of extensive international
properties, including Star in India and Fox’s 39% ownership of Sky
across Europe, enhances Disney’s position as a truly global
entertainment company with world-class offerings in key
regions
- Robert A. Iger to remain Chairman and
CEO of The Walt Disney Company through 2021
The Walt Disney Company (NYSE: DIS) and Twenty-First Century
Fox, Inc. (“21st Century Fox” —NASDAQ: FOXA, FOX) today announced
that they have entered into a definitive agreement for Disney to
acquire 21st Century Fox, including the Twentieth Century Fox Film
and Television studios, along with cable and international TV
businesses, for approximately $52.4 billion in stock (subject to
adjustment). Building on Disney’s commitment to deliver the highest
quality branded entertainment, the acquisition of these
complementary assets would allow Disney to create more appealing
content, build more direct relationships with consumers around the
world and deliver a more compelling entertainment experience to
consumers wherever and however they choose. Immediately prior to
the acquisition, 21st Century Fox will separate the Fox
Broadcasting network and stations, Fox News Channel, Fox Business
Network, FS1, FS2 and Big Ten Network into a newly listed company
that will be spun off to its shareholders.
This press release features multimedia. View
the full release here:
http://www.businesswire.com/news/home/20171214005650/en/
Left to right: Robert A. Iger, Chairman
and CEO of The Walt Disney Company, and Rupert Murdoch, Executive
Chairman, 21st Century Fox (Photo: Business Wire)
Under the terms of the agreement, shareholders of 21st Century
Fox will receive 0.2745 Disney shares for each 21st Century Fox
share they hold (subject to adjustment for certain tax liabilities
as described below). The exchange ratio was set based on a 30-day
volume weighted average price of Disney stock. Disney will also
assume approximately $13.7 billion of net debt of 21st Century Fox.
The acquisition price implies a total equity value of approximately
$52.4 billion and a total transaction value of approximately $66.1
billion (in each case based on the stated exchange ratio assuming
no adjustment) for the business to be acquired by Disney, which
includes consolidated assets along with a number of equity
investments.
Popular Entertainment Properties to Join Disney
Family
Combining with Disney are 21st Century Fox’s critically
acclaimed film production businesses, including Twentieth Century
Fox, Fox Searchlight Pictures and Fox 2000, which together offer
diverse and compelling storytelling businesses and are the homes of
Avatar, X-Men, Fantastic Four and Deadpool, as well as The Grand
Budapest Hotel, Hidden Figures, Gone Girl, The Shape of Water and
The Martian—and its storied television creative units, Twentieth
Century Fox Television, FX Productions and Fox21, which have
brought The Americans, This Is Us, Modern Family, The Simpsons and
so many more hit TV series to viewers across the globe. Disney will
also acquire FX Networks, National Geographic Partners, Fox Sports
Regional Networks, Fox Networks Group International, Star India and
Fox’s interests in Hulu, Sky plc, Tata Sky and Endemol Shine
Group.
“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 Robert A. Iger,
Chairman and Chief Executive Officer, The Walt Disney Company.
“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.”
“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 Rupert Murdoch, Executive Chairman of 21st Century
Fox. “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.”
At the request of both 21st Century Fox and the Disney Board of
Directors, Mr. Iger has agreed to continue as Chairman and Chief
Executive Officer of The Walt Disney Company through the end of
calendar year 2021.
“When considering this strategic acquisition, it was important
to the Board that Bob remain as Chairman and CEO through 2021 to
provide the vision and proven leadership required to successfully
complete and integrate such a massive, complex undertaking,” said
Orin C. Smith, Lead Independent Director of the Disney Board. “We
share the belief of our counterparts at 21st Century Fox that
extending his tenure is in the best interests of our company and
our shareholders, and will be critical to Disney’s ability to
effectively drive long-term value from this extraordinary
acquisition.”
Benefits to Consumers
The acquisition will enable Disney to accelerate its use of
innovative technologies, including its BAMTECH platform, to create
more ways for its storytellers to entertain and connect directly
with audiences while providing more choices for how they consume
content. The complementary offerings of each company enhance
Disney’s development of films, television programming and related
products to provide consumers with a more enjoyable and immersive
entertainment experience.
Bringing on board 21st Century Fox’s entertainment content and
capabilities, along with its broad international footprint and a
world-class team of managers and storytellers, will allow Disney to
further its efforts to provide a more compelling entertainment
experience through its direct-to-consumer (DTC) offerings. This
transaction will enable Disney’s recently announced Disney and
ESPN-branded DTC offerings, as well as Hulu, to create more
appealing and engaging experiences, delivering content,
entertainment and sports to consumers around the world wherever and
however they want to enjoy it.
The agreement also provides Disney with the opportunity to
reunite the X-Men, Fantastic Four and Deadpool with the Marvel
family under one roof and create richer, more complex worlds of
inter-related characters and stories that audiences have shown they
love. The addition of Avatar to its family of films also promises
expanded opportunities for consumers to watch and experience
storytelling within these extraordinary fantasy worlds. Already,
guests at Disney’s Animal Kingdom Park at Walt Disney World Resort
can experience the magic of Pandora—The World of Avatar, a new land
inspired by the Fox film franchise that opened earlier this year.
And through the incredible storytelling of National
Geographic—whose mission is to explore and protect our planet and
inspire new generations through education initiatives and
resources—Disney will be able to offer more ways than ever before
to bring kids and families the world and all that is in it.
Enhancing Disney’s Worldwide Offerings
Adding 21st Century Fox’s premier international properties
enhances Disney’s position as a truly global entertainment company
with authentic local production and consumer services across
high-growth regions, including a richer array of local, national
and global sporting events that ESPN can make available to fans
around the world. The transaction boosts Disney’s international
revenue mix and exposure.
Disney’s international reach would greatly expand through the
addition of Sky, which serves nearly 23 million households in the
UK, Ireland, Germany, Austria and Italy; Fox Networks
International, with more than 350 channels in 170 countries; and
Star India, which operates 69 channels reaching 720 million viewers
a month across India and more than 100 other countries.
Prior to the close of the transaction, it is anticipated that
21st Century Fox will seek to complete its planned acquisition of
the 61% of Sky it doesn’t already own. Sky is one of Europe’s most
successful pay television and creative enterprises with innovative
and high-quality direct-to-consumer platforms, resonant brands and
a strong and respected leadership team. 21st Century Fox remains
fully committed to completing the current Sky offer and anticipates
that, subject to the necessary regulatory consents, the transaction
will close by June 30, 2018. Assuming 21st Century Fox completes
its acquisition of Sky prior to closing of the transaction, The
Walt Disney Company would assume full ownership of Sky, including
the assumption of its outstanding debt, upon closing.
Transaction Highlights
The acquisition is expected to yield at least $2 billion in cost
savings from efficiencies realized through the combination of
businesses, and to be accretive to earnings before the impact of
purchase accounting for the second fiscal year after the close of
the transaction.
Terms of the transaction call for Disney to issue approximately
515 million new shares to 21st Century Fox shareholders,
representing approximately a 25% stake in Disney on a pro forma
basis. The per share consideration is subject to adjustment for
certain tax liabilities arising from the spinoff and other
transactions related to the acquisition. The initial exchange ratio
of 0.2745 Disney shares for each 21st Century Fox share was set
based on an estimate of such tax liabilities to be covered by an
$8.5 billion cash dividend to 21st Century Fox from the company to
be spun off. The exchange ratio will be adjusted immediately prior
to closing of the acquisition based on an updated estimate of such
tax liabilities. Such adjustment could increase or decrease the
exchange ratio, depending upon whether the final estimate is lower
or higher, respectively, than the initial estimate. However, if the
final estimate of the tax liabilities is lower than the initial
estimate, the first $2 billion of that adjustment will instead be
made by net reduction in the amount of the cash dividend to 21st
Century Fox from the company to be spun off. The amount of such tax
liabilities will depend upon several factors, including tax rates
in effect at the time of closing as well as the value of the
company to be spun off.
The Boards of Directors of Disney and 21st Century Fox have
approved the transaction, which is subject to shareholder approval
by 21st Century Fox and Disney shareholders, clearance under the
Hart-Scott-Rodino Antitrust Improvements Act, a number of other
non-United States merger and other regulatory reviews, and other
customary closing conditions.
Investor Conference Calls
Disney will conduct an investor conference call at approximately
8:00 a.m. EST / 5:00 a.m. PST today, Thursday, December 14, 2017.
To listen to the live webcast, please visit
www.disney.com/investors. The webcast presentation will be
archived.
21st Century Fox senior executives will host a conference call
at approximately 9:00 a.m. EST / 6:00 a.m. PST today, Thursday
December 14, 2017, to discuss the creation of “New Fox” and the
Disney transaction. The conference call will be webcast on 21st
Century Fox’s investor relations website at
www.21cf.com/investor-relations.
Disney will also hold a previously scheduled investor meeting
with Disney management at approximately 5:00 p.m. EST / 2:00 p.m.
PST today, Thursday, December 14, 2017, which will be webcast at
www.disney.com/investors. The webcast presentation will be
archived.
About The Walt Disney Company
The Walt Disney Company, together with its subsidiaries, is a
diversified worldwide entertainment company with operations in four
business segments: Media Networks, Parks and Resorts, Studio
Entertainment, and Consumer Products & Interactive Media.
Disney is a Dow 30 company and had annual revenues of $55.1 billion
in its Fiscal Year 2017.
About 21st Century Fox
21st Century Fox is one of the world's leading portfolios of
cable, broadcast, film, pay TV and satellite assets spanning six
continents across the globe. Reaching more than 1.8 billion
subscribers in approximately 50 local languages every day, 21st
Century Fox is home to a global portfolio of cable and broadcasting
networks and properties, including FOX, FX, FXX, FXM, FS1, Fox News
Channel, Fox Business Network, FOX Sports, Fox Sports Network,
National Geographic Channels, Star India, 28 local television
stations in the U.S. and more than 350 international channels; film
studio Twentieth Century Fox Film; and television production
studios Twentieth Century Fox Television and a 50 per cent
ownership interest in Endemol Shine Group. The Company also holds
approximately 39.1 per cent of the issued shares of Sky, Europe’s
leading entertainment company, which serves nearly 23 million
households across five countries. For more information about 21st
Century Fox, please visit www.21CF.com.
Important Information About the Transaction and Where to Find
It
In connection with the proposed transaction between The Walt
Disney Company (“Disney”) and Twenty-First Century Fox, Inc.
(“21CF”), Disney and 21CF will file with the Securities and
Exchange Commission (the “SEC”) a registration statement on Form
S-4 that will include a joint proxy statement of Disney and 21CF
that also constitutes a prospectus of Disney. 21CF will file with
the SEC a registration statement for a newly formed subsidiary
(“New Fox”), which is contemplated to own certain assets and
businesses of 21CF not being acquired by Disney in connection with
the proposed transaction. 21CF and Disney may also file other
documents with the SEC regarding the proposed transaction. This
document is not a substitute for the joint proxy
statement/prospectus or registration statement or any other
document which 21CF or Disney may file with the SEC. INVESTORS
AND SECURITY HOLDERS OF 21CF AND DISNEY ARE URGED TO READ THE
REGISTRATION STATEMENTS, THE JOINT PROXY STATEMENT/PROSPECTUS AND
ALL OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH
THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION
AND RELATED MATTERS. Investors and security holders may obtain
free copies of the registration statements and the joint proxy
statement/prospectus (when available) and other documents filed
with the SEC by 21CF and Disney through the web site maintained by
the SEC at www.sec.gov or by
contacting the investor relations department of:
21CF
Disney
1211 Avenue of Americas c/o Broadridge Corporate Issuer Solutions
New York, NY 10036 P.O. Box 1342 Attention: Investor Relations
Brentwood, NY 11717 1 (212) 852 7059 Attention: Disney Shareholder
Services
Investor@21CF.com
1 (855) 553 4763
Participants in the Solicitation
21CF, Disney and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information
regarding 21CF’s directors and executive officers, including a
description of their direct interests, by security holdings or
otherwise, is available in 21CF’s Annual Report on Form 10-K for
the year ended June 30, 2017 and its proxy statement filed on
September 28, 2017, which are filed with the SEC. Information
regarding Disney’s directors and executive officers, including a
description of their direct interests, by security holdings or
otherwise, is available in Disney’s Annual Report on Form 10-K for
the year ended September 30, 2017 and its proxy statement filed on
January 13, 2017, which are filed with the SEC. A more complete
description will be available in the registration statement on Form
S-4, the joint proxy statement/prospectus and the registration
statement of New Fox.
No Offer or Solicitation
This communication is for informational purposes only and is not
intended to and does not constitute an offer to subscribe for, buy
or sell, or the solicitation of an offer to subscribe for, buy or
sell, or an invitation to subscribe for, buy or sell any securities
or a solicitation of any vote or approval in any jurisdiction, nor
shall there be any sale, issuance or transfer of securities in any
jurisdiction in which such offer, invitation, sale or solicitation
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended, and otherwise in accordance with applicable law.
Cautionary Notes on Forward Looking Statements
This communication contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In this context,
forward-looking statements often address expected future business
and financial performance and financial condition, and often
contain words such as “expect,” “anticipate,” “intend,” “plan,”
“believe,” “seek,” “see,” “will,” “would,” “target,” similar
expressions, and variations or negatives of these words.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements about the
consummation of the proposed transaction and the anticipated
benefits thereof. These and other forward-looking statements are
not guarantees of future results and are subject to risks,
uncertainties and assumptions that could cause actual results to
differ materially from those expressed in any forward-looking
statements, including the failure to consummate the proposed
transaction or to make any filing or take other action required to
consummate such transaction in a timely matter or at all, are not
guarantees of future results and are subject to risks,
uncertainties and assumptions that could cause actual results to
differ materially from those expressed in any forward-looking
statements. Important risk factors that may cause such a difference
include, but are not limited to: (i) the completion of the proposed
transaction may not occur on the anticipated terms and timing or at
all, (ii) the required regulatory approvals are not obtained, or
that in order to obtain such regulatory approvals, conditions are
imposed that adversely affect the anticipated benefits from the
proposed transaction or cause the parties to abandon the proposed
transaction, (iii) the risk that a condition to closing of the
transaction may not be satisfied (including, but not limited to,
the receipt of legal opinions and rulings with respect to the
treatment of the transaction under U.S. and Australian tax laws),
including the tax-free treatment of the transaction to 21CF’s
stockholders of the distribution of shares of New Fox common stock,
(iv) the risk that the anticipated tax treatment of the transaction
is not obtained, (v) an increase or decrease in the anticipated
transaction taxes (including due to any changes to tax legislation
and its impact on tax rates (and the timing of the effectiveness of
any such changes)) to be paid in connection with the Separation
prior to the closing of the transactions could cause an adjustment
to the exchange ratio, (vi) potential litigation relating to the
proposed transaction that could be instituted against 21CF, Disney
or their respective directors, (vii) potential adverse reactions or
changes to business relationships resulting from the announcement
or completion of the transactions, (viii) risks associated with
third party contracts containing consent and/or other provisions
that may be triggered by the proposed transaction, (ix) negative
effects of the announcement or the consummation of the transaction
on the market price of 21CF and/or Disney’s common stock, (x) risks
relating to the value of the Disney shares to be issued in the
transaction and uncertainty as to the long-term value of Disney’s
common stock, (xi) the potential impact of unforeseen liabilities,
future capital expenditures, revenues, expenses, earnings,
synergies, economic performance, indebtedness, financial condition
and losses on the future prospects, business and management
strategies for the management, expansion and growth of Disney’s
operations after the consummation of the transaction and on the
other conditions to the completion of the merger, (xii) the risks
and costs associated with, and the ability of Disney to, integrate
the businesses successfully and to achieve anticipated synergies,
(xiii) the risk that disruptions from the proposed transaction will
harm 21CF’s or Disney’s business, including current plans and
operations, (xiv) the ability of 21CF or Disney to retain and hire
key personnel, (xv) adverse legal and regulatory developments or
determinations or adverse changes in, or interpretations of, U.S.,
Australian or other foreign laws, rules or regulations, including
tax laws, rules and regulations, that could delay or prevent
completion of the proposed transactions or cause the terms of the
proposed transactions to be modified, (xvi) the risk that New Fox,
as a new company that currently has no credit rating, will not have
access to the capital markets on acceptable terms, (xvii) the risk
that New Fox may be unable to achieve some or all of the benefits
that 21CF expects New Fox to achieve as an independent,
publicly-traded company, (xviii) the risk that New Fox may be more
susceptible to market fluctuations and other adverse events than it
would have otherwise been while still a part of 21CF, (xix) the
risk that New Fox will incur significant indebtedness in connection
with the separation and distribution, and the degree to which it
will be leveraged following completion of the distribution may
materially and adversely affect its business, financial condition
and results of operations, (xx) the ability to obtain or consummate
financing or refinancing related to the transaction upon acceptable
terms or at all, (xxi) as well as management’s response to any of
the aforementioned factors.
These risks, as well as other risks associated with the proposed
transactions, will be more fully discussed in the joint proxy
statement/prospectus that will be included in the registration
statement on Form S-4 that will be filed with the SEC in connection
with the proposed transactions, as well as in the registration
statement filed with respect to New Fox. While the list of factors
presented here is, and the list of factors to be presented in the
registration statement on Form S-4 and the registration statement
of New Fox are, considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward looking statements.
Consequences of material differences in results as compared with
those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks,
any of which could have a material adverse effect on 21CF’s or
Disney’s consolidated financial condition, results of operations,
credit rating or liquidity. Neither 21CF nor Disney assumes any
obligation to publicly provide revisions or updates to any forward
looking statements, whether as a result of new information, future
developments or otherwise, should circumstances change, except as
otherwise required by securities and other applicable laws.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171214005650/en/
Media Contacts:The Walt Disney Company:Zenia Mucha, (818)
560-5300zenia.mucha@disney.comor21st Century Fox:Julie Henderson,
(310) 369-0773jhenderson@21cf.comorInvestor Contacts:The
Walt Disney Company:Lowell Singer, (818)
560-6601lowell.singer@disney.comor21st Century Fox:Reed Nolte,
(212) 852-7092rnolte@21cf.com
Walt Disney (NYSE:DIS)
Historical Stock Chart
From Feb 2024 to Mar 2024
Walt Disney (NYSE:DIS)
Historical Stock Chart
From Mar 2023 to Mar 2024