Comcast increases bid for Fox as media consolidation trend continues
Comcast, the US media giant that owns the NBC network, yesterday made an increased bid worth about $65 billion to acquire most of the assets of Rupert Murdoch’s 21st Century Fox, including Sky, the UK-based pay-TV operator, a 19-per-cent premium on Walt Disney’s rival offer for the same assets.
Last December, Disney agreed to buy the majority of Fox for $52.4 billion in stock. The deal included Fox’s movie studios, networks National Geographic and FX, India's Star TV, and stakes in Sky, Endemol Shine Group and Hulu, as well as regional sports networks.
Neither bid includes USA’s Fox News, Fox Sports 1 nor the Fox broadcast network and its TV stations, which will be spun off into a new company.
The Comcast bid follows approval by a US district court earlier this week of a planned $85.4-billion merger of Time Warner, the US media giant that owns TV networks including HBO and CNN, and telecoms giant AT&T.
The bid by Comcast, which is the world’s largest broadcasting and cable TV company by revenue, was dependent on the Time Warner-AT&T merger being approved.
A previous $60-billion bid by Comcast for the Fox assets was rejected by Murdoch last year on the grounds of regulatory concerns and share structure.The bid is the latest move in a worldwide trend towards integration and consolidation involving telecoms and media companies.
Brian Roberts, Comcast’s chief executive, told investors yesterday: “These are highly strategic and complementary businesses, and we are in our minds the right buyer… We firmly believe that the truly great media companies of the next century will be integrated global entities.”
Meanwhile, Barclays analysts said that the industry is moving towards “an end state maybe five years from now where three or four large, vertically integrated conglomerates with presence in wireline, wireless and content potentially compete with each other” and with the technology giants.
Earlier this month, Matt Hancock, the UK’s culture secretary, said that he would approve 21st Century Fox’s own proposed deal to acquire control of Sky.
Fox had previously agreed a deal worth £11.7 billion ($15.6 billion) to acquire the 61 per cent of Sky it does not already own, but it was awaiting regulatory clearance in the UK after the Competition and Markets Authority provisionally blocked the takeover on the grounds of media plurality.
Sky has a total of 22.9 million subscribers in the UK, Ireland, Germany, Austria and Italy.
In April, Comcast tabled a separate £22-billion bid for Sky, putting it in competition with Fox. This month, Hancock also announced that Comcast’s bid for Sky would not require regulatory approval in the UK.