U.S. Government Approves Fox Sale To Disney! Passes Anti-Trust Hurdle With One Caveat!
Variety reports:
- WASHINGTON — The Justice Department’s approval of The Walt Disney Co.’s purchase of Fox assets is quicker than Wall Street analysts and others were expecting — and it certainly has implications as Comcast weighs whether to counter its counter offer.
UBS’s Media and Pay TV analysts called it a “FastPass approval,” while MoffettNathanson wrote that “it seems to us that the pressure is now back on Comcast to come in with a more significant bid above Disney’s $38 per share offer to help sway the 21st Century Fox Board to reject the bird in the hand regulatory clearance.”
Comcast’s proposed merger with NBCUniversal was unveiled in late 2009, but took more than a year to secure a green light from the DOJ and the FCC. AT&T’s acquisition of Time Warner, first proposed in October 2016, took more than 18 months as the government challenged it in court…
…When Disney and Fox announced their deal in December, the expectation was that it would take 12 to 18 months to close, though UBS’s John Hodulik and other analysts wrote that they believed that the Disney-Fox deal could close before the end of the year…
…In announcing the approval, the Justice Department noted that “to streamline agency clearance, Disney agreed to divest the 22 RSNs rather than continue with the Antitrust Division’s ongoing merger investigation.” In other words, it became clear to Disney what the Justice Department’s major concern was with the deal: Disney’s purchase of the RSNs would harm competition for sports programming in those local markets. Rather than try to challenge that contention or negotiate some kind of conditions, a process that could have taken many more months, Disney agreed to the type of structural remedy favored by the DOJ under antitrust chief Makan Delrahim.
Delrahim seemed to signal that approval may be imminent several weeks ago, when he told a conference on June 7 that the companies “had good advice and carved out surgically what a transaction that might be doable.”
He said, “They didn’t acquire or propose to acquire Fox Sports One and Two. They didn’t acquire Fox Broadcasting and say, ‘We’ll combine this with ABC broadcasting, and don’t worry about it. We will have an arbitrator decide if prices go up.’”
Disney and Fox also did not have to secure the FCC’s approval, given that there were no license transfers that would trigger a review by regulators there. Doing so would have opened up the transaction to a new level of scrutiny and attention, as the FCC determines if a merger is in the public interest and typically puts a merger on the docket for public comment. Congress does not vote on mergers, but typically holds hearings on major media transactions. None was held for the Disney-Fox deal. For his part, President Trump appeared to give the deal his blessing on the day the transaction was announced…
