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21st Century Fox
Inc.
FOX 0.83%
after losing on an auction to own all
Sky
PLC, said Wednesday that it would sell its 39% stake in the European pay TV giant to
Comcast
Corp.
CMCSA 0.54%
for more than $ 15 billion.
The move, for which
Walt Disney
Co.
agreed, comes after Comcast beat Fox on Saturday at a rare auction held by UK regulators to decide who could buy Sky after a long bidding war.
After three rounds of bidding, Comcast said it would pay £ 17.28 ($ 22.59) per share for Sky, exceeding the highest bid of $ 15.67 per share.
Comcast's winning bid of $ 38.8 billion was 40.1% higher than its initial offering of £ 12.50 per share in February and Fox's initial offering of £ 10.75 per share in December 2016.
The win came after Comcast lost to Disney this summer in a separate bidding war for Fox's entertainment assets. Disney has agreed to pay $ 71 billion for Fox's famous Hollywood studio and its international assets, including a 39% stake in Sky that Fox had held for a long time.
Sky sells telephony, television and Internet services to 23 million European customers and produces its own information, entertainment and sports programs. The purchase of Sky will help Comcast diversify its revenue base beyond the United States.
Fox's decision to sell its shares in Sky paves the way for Comcast to complete the acquisition without the risk of having a competitor, in the form of Disney, as the largest shareholder. Comcast said it was ready to acquire Sky as long as it would have earned more than 50% of the shares. However, the fact that Disney remains a major shareholder could have put Comcast on track to exploit Sky, thereby undermining the potential benefits of the property.
Nevertheless, the sale of Fox's stake in Sky will generate a big profit for Fox and the Murdoch family, one of its major shareholders. Disney also benefits because it can use the proceeds from the sale of Sky shares to fund its separate acquisition in order to purchase a large portion of Fox's entertainment assets.
In a statement, Disney said the sale of Sky, as well as the sale of Fox's regional sports networks required by the Justice Department, would reduce the amount of debt it would incur for a greater portion of Fox's assets. .
From AT & T and Time Warner in pursuit of 21st Century Fox and Sky, media mergers are in full swing. Why now? Amol Sharma from the WSJ answers all your questions about the driving forces of the media business.
-Erich Schwartzel contributed to this article.
Write to Ben Dummett at [email protected]
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