The US Justice Department has
agreed to a settlement with Disney that will allow it to purchase most of 21st
Century Fox's assets.
As part of the settlement,
Disney will have to sell off 22 of Fox's regional sports networks.
Disney's purchase isn't yet
final. The settlement must first be approved by a federal judge, and Fox's
shareholders also have to vote in favor of the deal.
Disney said in a statement
that it is pleased to resolve the Justice Department's "limited potential
concerns." The company had earlier said in proxy filings that it would
sell the sports networks if required by the government.
Disney first reached an
agreement last December to buy most of Fox's TV and movie assets. The company
sweetened its offer earlier this month after Comcast tried to gatecrash the
deal.
Comcast (CMCSA) has
not said publicly whether it will try to counter again. Comcast did not
immediately respond to a request for comment Wednesday.
Last week, Fox said it would
still consider bids from other companies, even though it believed Disney's new
offer was better than Comcast's.
21st Century Fox is the next
big prize as the media industry consolidates to survive against competitors
such as Netflix and Facebook.
If Disney (DIS) closes
the deal, it will get Fox's movie studio along with cable channels like FX and
National Geographic. Disney would also get Fox's stake in the streaming service
Hulu, along with its stake in the European broadcaster Sky.
The government approved the
Disney deal with Fox about six months after the merger was announced, a
relatively quick timeline for the large size of the transaction.
Wednesday's news comes about
two weeks after the Justice Department lost its attempt in court to stop
AT&T from buying CNN parent company Time Warner.
Antitrust regulators
challenged that deal because they said it would harm competition and raise
prices for consumers.
In Disney's case, officials
said their concerns about the deal would be alleviated as long as Disney sold
the regional sports networks.
"American consumers have
benefitted from head-to-head competition between Disney and Fox's cable sports
programming that ultimately has prevented cable television subscription prices
from rising even higher," said Assistant Attorney General Makan Delrahim
of the Justice Department's Antitrust Division. "Today's settlement will
ensure that sports programming competition is preserved in the local markets
where Disney and Fox compete for cable and satellite distribution."
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