Fox Decided To Sell 39% Stake In Sky

  • Sep 27, 2018 AEST
  • Team Kalkine
Fox Decided To Sell 39% Stake In Sky

On September 26, 2018, Twenty-first Century Fox Inc. reported that the company would be unloading its 36% holding in Sky. The company has decided to sell this to Comcast Corporation, which is the leading cable company based out of the United States. As a result of the deal, the Comcast’s takeover deal got completed while ending Fox’s relationship with the Sky Plc. Comcast managed to win the bidding battle which was going with the Fox and the former came up with the $40 billion offer price. Walt Disney Co. (NYSE: DIS) stated that this acquisition was also by allowed by it. Disney entered into an agreement to purchase Fox a few months ago for an amount of $71.3 billion. As a result, yesterday the share price of Disney witnessed a strong momentum and ended the day with 1.39%.

As a result of Fox’s sale, the full control has been granted to the chief executive officer or CEO of Comcast paving the way for the company to expand on the global basis. With this, Comcast would now be serving 53 million customers. The positive impacts of the acquisition would also be felt by Disney in terms of reduction of its debt which could further improve the balance sheet of the company. Because of divestiture in regard to the regional sports networks as well as the sale of the Sky, Disney would be able to reduce its acquisition cost ($71.3 billion) which was incurred in order to acquire Fox. The sale would help Disney in the cost reduction by around $30 billion. 

The top management of Sky stated that the company looks forward to this new chapter. The stake which was owned by Fox was valued at $15 billion as per the agreement’s terms. The companies which were in the bidding war badly wanted Sky so that the winner could increase the international exposure. However, the Disney lost the bidding war, it might not be regarded as the “real loss” to the company. This sale is expected to help Disney moving forward. The sale could help Disney in the debt reduction as the company would be taking debt to execute the acquisition of Fox. Also, Disney could deploy the funds towards streaming plans.

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