Business

Fox-Disney merger cleared, but sports networks must be sold

An image of Mickey Mouse, the official mascot of The Walt Disney Company, is displayed outside the Disney Store in Times Square, December 14, 2017 in New York City. Image copyright Getty Images

US regulators have cleared Walt Disney Co's plan to buy most of 21st Century Fox, removing a final barrier to the $71.3bn (£54.2bn) deal.

The approval requires the sale of Fox's regional sports networks in the US, due to competition concerns, the Justice Department's antitrust division said.

Disney, which had signalled willingness to sell the sports networks, said it was "pleased" with the decision.

The deal still needs approval in other countries to go forward.

Disney is planning to buy Fox's entertainment assets in the hope of beefing up the range of content it can offer, as it plans services to compete with streaming companies such as Netflix.

Fox, which is led by Rupert Murdoch and his family, plans to retain its news and sports divisions, creating a new company for those holdings, which include the flagship Fox News Channel.

The Justice Department said without the sale of the 22 regional sports networks, the deal may have led to higher prices for cable sports watchers in local markets, where Fox and Disney currently compete.

Currently, Fox's regional sports networks have more than 60 million subscribers and local rights to a majority of baseball and basketball teams.

Disney is the owner of ESPN and other local channels.

Image copyright Getty Images
Image caption Disney wants access to Fox's catalogue of material, which includes The Simpsons

The approval makes the transaction, first announced in December, significantly more likely to proceed.

However, shareholders must still sign off on the plan, which has been complicated by a rival interest from Comcast in buying the Fox assets. Earlier this month, Comcast outbid Disney's original $52.4bn bid, offering $65bn.

But Fox said it planned to proceed with Disney, after the firm raised its own offer to $71bn.

Fox said the amended agreement was superior to Comcast's proposal, but shareholders still need to vote on the matter and Comcast could still return with a higher offer.

More on this story