Disney closes landmark Fox acquisition deal

The Walt Disney Company's acquisition of 21st Century Fox, which took effect on Wednesday, will greatly expand Disney's global presence and shake up the entertainment industry worldwide.

China's regulators approved the Disney–Fox deal without any conditions in November 2018. On March 11, 2019, the acquisition was finally given the green light after Mexico's telecom regulator approved the deal. This came after antitrust agencies and regulators in the United States, India, the European Commission and Brazil cleared the deal. 

"This is an extraordinary and historic moment for us - one that will create significant long-term value for our company and our shareholders," said Robert A. Iger, chairman and CEO of The Walt Disney Company. "Combining Disney's and 21st Century Fox's wealth of creative content and proven talent creates the preeminent global entertainment company, well positioned to lead in an incredibly dynamic and transformative era."

On Tuesday, 21st Century Fox officially completed the distribution of shares ahead of the completion of the deal and announced that the per share value of the merger consideration, calculated in accordance with the merger agreement, stood at US$51.572626. The acquisition price implies a total equity value of approximately US$71 billion and a total transaction value of approximately US$71 billion.

The Walt Disney Company first announced the agreement to acquire 21st Century Fox on Dec. 14, 2017. Disney said in its Tuesday press release that the acquisition of Fox's collection of businesses and franchises will allow it to provide more appealing high-quality content and entertainment options to meet growing consumer demand and increase its international footprint. It added that the deal will also help Disney expand its direct-to-consumer offerings, which includes ESPN+ for sports fans, the highly-anticipated Disney+streaming video-on-demand service launching in late 2019; and Disney and 21st Century Fox's combined ownership stake in Hulu.

As part of this deal, Disney will acquire 21st Century Fox's renowned film production businesses, including Twentieth Century Fox, Fox Searchlight Pictures, Fox 2000 Pictures, Fox Family and Fox Animation; Fox's television creative units, Twentieth Century Fox Television, FX Productions and Fox21; FX Networks; National Geographic Partners; Fox Networks Group International; Star India; and Fox's interests in Hulu, Tata Sky and Endemol Shine Group. Disney and 21st Century Fox entered into a consent decree with the U.S. Department of Justice last year under which Disney will divest 21st Century Fox's Regional Sports Networks.

China has also been a key market for both Disney and Fox. In 2016, Disney opened the Shanghai Disney Resort, its first theme park on the Chinese mainland. China, being the world's second largest film market, has also become a key source of box office revenue. Some may lament that Hollywood's "Big Six" film studios has now become the "Big Five," but, face it, many fans would love to watch movies showing the X-Men alongside Marvel superheroes, or Star Wars meets Avatar rides in Disneyland.

Disney's total revenue for its box office hits screened in China last year stood at a staggering 4.99 billion yuan (US$743.7 million) with the biggest earner "Avengers: Infinity War" grossing 2.39 billion yuan (US$359.54 million). Fox's performance was lower, it earned a total revenue of 743 million yuan (US$110.6 million) from China's box office last year with its biggest contributor "Maze Runner: The Death Cure" grossing 315 million yuan (US$46.9 million) in 2018.

The two big studios led the Chinese box office after the competitive Spring Festival film season. Disney and Marvel's latest superhero movie "Captain Marvel" dominated the Chinese market, raking in 910 million yuan (US$135 million) so far to become the number two highest-grossing stand-alone Marvel superhero film in China, second only to "Captain America: Civil War." Fox's "Alita: Battle Angel" raked in 886 million yuan (US$132 million) in China since it was released on Feb. 22, making it the top-grossing market for the film worldwide, and the third highest-grossing Fox film in China after "Avatar" and "Titanic."

Disney also held a modest premiere for "Dumbo" in Shanghai on Tuesday night, which is a Tim Burton live-action remake of the Disney classic animated feature that is set to hit the big screens on March 29. Fox will also open the Academy Award-winning music biopic blockbuster "Bohemian Rhapsody" in China on March 22. Both studios will have more high-profile remakes or sequel blockbusters to roll out in China in next two years, including the Chinese' favorite and much anticipated Disney's "Lion King," "Avengers: Endgame," "Toy Story 4," and Fox's "Dark Phoenix" and "Avatar 2."

(CHINA DAILY)