Disney to buy Fox film, TV businesses for $52 billion

Walt Disney Co on Thursday agreed to buy film, TV and international assets from Rupert Murdoch’s Twenty-First Century Fox Inc for $52.4 billion (£39 billion) as Disney seeks greater scale to tackle growing competition from Netflix and Amazon.com. 

Under the terms of the all-stock deal, Disney acquires significant assets from Fox, including the studios that produce the blockbuster Marvel superhero pictures and the “Avatar” franchise, as well as hit TV shows such as “The Simpsons”.

Fox shareholders will receive 0.2745 Disney shares for each share held. This translates to a value of $29.50 per share for the assets that Disney is buying, Reuters calculations based on Disney’s Wednesday market closing price show.

Immediately prior to the acquisition, 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. 

Disney will also assume about $13.7 billion of Fox’s net debt in the deal.

Through Fox’s stake in the Hulu video streaming service, Disney will assume majority control of one of Netflix Inc’s main competitors. Hulu is also partially owned by Comcast Corp and Time Warner Inc.

Tech rally leaves Wall Street lower

Wall Street has fallen as a technology rebound lost steam and Walt Disney shares dipped, while investors assessed how a US tax overhaul would impact earnings.

Wall Street fell on Tuesday as a technology rebound lost steam and Walt Disney Co shares dipped, while investors assessed how a Republican US tax overhaul would impact corporate earnings.

The S&P 500 fell for a third straight session, a streak not seen since early August, trimming the index's rally this year to 17 per cent.

Buoyed by a 2.53 per cent increase in Electronic Arts Inc , the S&P 500 information technology index ended up 0.21 per cent, but pared earlier gains of as much as 1.39 per cent.

All three major indexes moved sharply lower late in the session.The Nasdaq Composite dropped 0.19 per cent to 6,762.21.Ten of the 11 major S&P sectors fell, led by losses in telecom services and utilities.

Declining issues outnumbered advancing ones on the NYSE by a 1.80-to-1 ratio; on Nasdaq, a 1.83-to-1 ratio favored decliners.

About 6.9 billion shares changed hands on US exchanges, just above the 6.7 billion daily average for the past 20 trading days, according to Thomson Reuters data.