Disney has cleared a key hurdle in its bid to acquire 21st Century Fox: the company has won antitrust approval from the Justice Department, albeit with one condition. The Justice Department required that Disney divest Fox’s regional sports networks, as they would create anti-competitive conflicts due to Disney’s ownership of ESPN, according to Variety. Disney has agreed to the conditions.
In December, Disney announced that it would acquire 21st Century Fox’s media holdings: its television and movie studios (but not its sports and news operations). Talks for the acquisition took place last fall, and were complicated when Comcast made overtures of its own.
Over the course of those talks, it became apparent that Fox was concerned with the prospects of an acquisition by either company being blocked by the Justice Department. That would mean no sale, or that it might have to shed substantial assets and would thus fetch a lower price. Fox’s board discussed the potential problems with a Comcast acquisition, given that there had been complications with AT&T and Time Warner’s merger. Disney, on the other hand, felt like a far more natural fit for the company’s movie and TV studios, given that it was already in the business of producing such content and had a history of making major content acquisitions, like Pixar, Marvel Studios, and Lucasfilm.
After the AT&T–Time Warner merger won approval, Comcast recently made a bid of its own, offering up $65 billion to acquire Fox, prompting Disney to up its offer to $71.3 billion. Comcast will likely make another bid as well. But the fact that Disney has secured US antitrust approval for the deal will likely help its efforts, given that such regulatory approval will let the sale go all the smoother.