Encouraged by this week's AT&T merger victory, Comcast has formally made a $65 billion all-cash offer for 21st Century Fox's TV and film assets in a latest example of USA merger mania under the Trump administration.
"We have long admired what the Murdoch family has built at Twenty-First Century Fox", Comcast CEO Brian Roberts said in a letter to the Murdoch family. In a twist, Comcast cmcsa may try to scoop Disney with an even higher bid. And it looks like they're coming out swinging: a Comcast Fox deal would mean that Comcast would buy the Fox assets for a hefty $65 billion, far surpassing Disney's offer of $52 billion.
Disney's deal includes Fox's stake in United Kingdom -based Sky, a film studio, cable networks and other assets.
The Justice Department had pressured Time Warner to sell Turner Broadcasting, which includes the cable news operation CNN, or other segments of the business, which both companies resisted. That would be Rupert Murdoch, the largest shareholder of Fox.
The Department of Justice sued in November 2017 to block AT&T's $85 billion acquisition of Time Warner on grounds that the merger could hurt competition in the pay-TV industry. So not only is Comcast's bid 19 percent higher, but it's in cold, hard cash, which is surely appealing to Fox. In addition to the $35-per-share cash offer, Comcast agreed to pay a $2.5 billion termination fee if the deal doesn't pass regulatory muster. The telecom would also have an interest in getting cable subscribers to switch from their providers to DirectTV (which AT&T already owns).
Comcast was in talks to buy Fox late previous year.
The Disney deal, if it survives, has been on track to close within an 18-month window from the original agreement the two companies made in December of 2017.
Comcast in a statement outlined an offer that was similar to Disney's, including a commitment to the same divestitures.
Disney itself has "surgically" structured a transaction that "might be doable", avoiding Fox Broadcasting and big Fox sports channels, USA antitrust chief Makan Delrahim said last week. In addition the cable giant says it will reimburse Fox the full $1.525bn break-up fee it would owe Disney if Team Rodent's offer is turned down. AT&T and Time Warner argue they're simply trying to stay afloat in the new streaming environment.
Comcast said it is confident it will win regulatory approval and that its new offer "fully addresses" the stated concerns.