The final obstacle to the Disney-Fox deal has fallen by the wayside.
Comcast announced Thursday that it is dropping its spoiler bid for 21st Century Fox assets, ending a brief bidding war over the package of movie and television studios, national cable channels and regional sports networks. With Disney having already won government approval for its acquisition of the Fox assets, all that remains to close the deal is for Fox shareholders to vote on the deal a week from Friday.
Comcast had been in the hunt for the Fox assets since the beginning. The company actually outbid Disney in the initial negotiations last winter, offering a reported $60 billion to Disney’s $52 billion. Fox passed on the Comcast offer due primarily to antitrust concerns.
The justice department’s role in the AT&T-Time Warner merger played a role in Comcast’s decision-making this summer. As reported by CNBC last month, Comcast’s decision to get back into the bidding for Fox was contingent on the government losing its court challenge to the AT&T deal. The same day AT&T prevailed in court, Comcast announced its $65 billion bid for the Fox assets.
In the month since, Disney increased its bid to $71 billion and won government approval by agreeing to sell off the Fox RSNs. In addition, the government announced it would appeal its defeat in the AT&T case. Few expect the appeal to succeed, but the move reinforced to Comcast that acquiring the Fox assets would incur potentially severe regulatory scrutiny. Comcast’s deal to acquire Fox would resemble AT&T’s bid for Time Warner, given both companies are both media providers and distributors.
Rather than raise its bid even higher and then deal with potentially years of litigation, Comcast has bowed out.
Once the Disney-Fox deal closes, the company will have 90 days to sell the RSNs. As has always been the case, Fox will keep its flagship network, FS1 and FS2, and two cable news outlets.
