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What's going on?
Fresh on the heels of AT&Ts acquisition of Time Warner, cable provider Comcast launched a $65 billion bid for 21st Century Fox potentially kicking off a bidding war with Disney.
What does this mean?
Comcast was perhaps emboldened by the US Department of Justices decision on Tuesday to allow television service providers to buy media companies. By owning 21st Century Fox, Comcast likely hopes itll make its subscription more attractive and help to curb millennials cord cutting of traditional TV in favor of streaming services like Amazon Video, YouTube and Netflix. Disney seems to have had similar ideas, hoping to bolster its content library with Foxs assets and already tendering an offer for Fox but Comcast has offered $8 billion more. Let the battle begin!
Why should I care?
For markets: The ball is in Foxs court.
Foxs shares rose last week as investors reacted to the possibility of a bidding war erupting. Foxs board will consider both offers, which may lead to further negotiations: if Fox decides Comcasts offer is a better fit, Disney will have five days to respond with a fresh proposal. In that case, Disney will likely have to up its game: Comcasts offering to buy Fox in cold hard cash whereas Disney would be paying with its own stock.
The bigger picture: European regulators approved Comcasts acquisition of Sky on Friday.
On Friday, the European Commission approved Comcasts other media company takeover of the UKs Sky for $31 billion. American Comcast is keen to grow its global footprint (Skys got operations in Germany, Austria, Italy and Ireland, as well as the UK) to compete more effectively against its online-only (and therefore not-so-geographically-bound) rivals. Skys stock didnt move in response, likely as investors had already expected approval to be forthcoming.
Originally posted as part of the Finimize daily email.
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