The Walt Disney Company said it has agreed to acquire 21st Century Fox, including the Twentieth Century Fox Film and Television studios, along with cable and international TV businesses and the company's debt, for USD 52.4 billion in stock, subject to adjustment based on tax liabilities. The price implies a total transaction of USD 66.1 billion. Before 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. Bob Iger will remain chairman and CEO of The Walt Disney Company through 2021. The acquisition is expected to yield at least USD 2 billion in cost savings from efficiencies realised through the combination of businesses.

Under the terms of the agreement, shareholders of 21st Century Fox will receive 0.2745 Disney shares for each 21st Century Fox share. Disney will also assume USD 13.7 billion worth of 21st Century Fox debt. Disney will issue 515 million new shares to Fox shareholders, representing a 25 percent stake in Disney on a pro forma basis.

Fox’s film businesses will go to Disney, including properties such as X-Men, Avatar, The Simpons, FX Networks and National Geographic. The Disney portfolio will also take in Fox’s TV units, Twentieth Century Fox Television, FX Productions and Fox21. 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, Tata Sky and Endemol Shine Group.

The deal will enable Disney to use more innovative technology, 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 through direct-to-consumer (DTC) offerings. The acquisition will in general give Disney a more international revenue mix and exposure, with more local production and consumer services across high-growth regions, including local, national and global sporting events from ESPN.

Before the transaction completes, Fox will look to complete its planned buy of the 61 percent in Sky it doesn’t already own. The current Sky offer is expected to close by end June, with Fox assuming all outstanding Sky debt upon close. Sky alone serves nearly 23 million households in the UK, Ireland, Germany, Austria and Italy. Fox Networks International has more than 350 channels in 170 countries while Star India operates 69 channels, reaching 720 million viewers a month across India and more than 100 other countries.

The boards of directors of both Disney and Fox have approved the transaction. It still needs clearance under the Hart-Scott-Rodino Antitrust Improvements Act, a number of other non-US merger and other regulatory reviews, and other customary closing conditions.