Disney and Fox Shareholders Approve Merger. Still Needs Government Approval
At a special meetings early this morning, Disney and 21st Century Fox shareholders approved the merger of the two companies. Disney said the 99% of shareholders voted for approval while Fox said a “majority” approved it. The final tally would be in an SEC filing at the end of the day. The whole process took about 10 minutes. Few spoke when given an opportunity.
The $71.3 billion deal has to pass through regulatory hoops. Most of the consequential reviews have already been completed when the Department of Justice reached a settlement with Disney.
Disney will be required to divest twenty-two regional sports networks in order to complete the acquisition. The Justice Department Antitrust Division filed a civil antitrust lawsuit in June to block the acquisition. The concern is over higher prices over subscription prices.
While concerns have been raised over cable prices, it doesn’t seem that concerns are being raised over movie ticket prices where Disney will control around 60% of the market and has already brought pressure on theater owners as well as reporters. Consumers will likely suffer from the merger and decrease in competition. The company will also own a majority of Hulu. It is expected the merger will cost 5,000 to 10,000 jobs.
Fox shareholders will get $38 per share in either cash or shares of New Disney, a new holding company that will become the parent of both Disney and Fox. Disney expects to pay about $35.7 billion in cash and 343 million new Disney shares to 21st Century Fox stockholders. Fox stockholders will own about 17-20% of New Disney on a pro forma basis.