Monster merger: Disney to acquire Fox

Superheros. Jedis. Inanimate objects talking — these are everyone’s favorite things. And now Disney owns all of them. Yesterday, the media juggernaut announced their plan to buy 21st Century Fox for ...

Superheros. Jedis. Inanimate objects talking — these are everyone’s favorite things. And now Disney owns all of them.

Monster merger: Disney to acquire Fox

Yesterday, the media juggernaut announced their plan to buy 21st Century Fox for over $66B, the second-largest merger this year.

The deal will include Fox’s movie studios, networks Nat Geo and FX, and a 60% stake in Hulu, among other things.

And they’re waging war on Netflix

In Disney’s all-out media domination, if (and when) this deal goes through, they can finally check “streaming market” off their bucket list.

This merger will allow Disney to sell a trifecta of streaming services: a sports streaming platform, Hulu, and in 2019, their own mega movie and TV subscription service.

But, history says this deal may not be such a slam-dunk

While shareholders are obviously happy, history has shown time and time again that mega-mergers usually destroy a company’s value over time.

According to a report from Accenture, market returns on acquisitions valued over $25B tend to perform worse (usually between 7% and 12%) than smaller ones.

That said… you try telling Disney they shouldn’t do something.

Topics: Disney

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