DOJ Seeks More Information on Disney/Fox, Which Has $2.5 Billion Breakup Fee
Disney's proposed buy of Fox's nonbroadcast assets got a DOJ second request for information March 5, the companies said in a draft proxy vote filing to the SEC Wednesday. The companies said Disney might have to pay a termination fee…
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of $2.5 billion if the deal isn't consummated because it doesn't receive regulatory approvals or is blocked on antitrust grounds. They said completion is conditioned on FCC consent "if required," plus regulatory approvals from the EU, Australia, Brazil, Canada, China, India, Israel, Japan, Mexico, the Russian Federation, South Africa, South Korea, Taiwan, Turkey and the U.K. "if required." The deal would boost the buyer's ability to do direct-to-consumer (DTC) offerings and its IP portfolio and output capability, Disney's board said. The board said the transaction would speed up its DTC strategy via Fox's content and capabilities and as a result of having a controlling stake in Hulu. Disney said Fox received an unsolicited offer from an unnamed second company after news of Disney/Fox deal broke in November, but Fox's board decided a deal with that company posed "a qualitatively higher level of regulatory risk, including the possibility of an outright prohibition, than such a transaction with Disney." Disney/Fox is seen facing an uncertain reception from DOJ but the FCC likely won't play a role (see 1712130010). Comcast bid for Sky, which 21st Century Fox owns much of, and the cable operator has been named as a possible buyer of all of Fox (see 1802270011).