The merger of Fox News and News Corp has been halted by executive chairman Rupert Murdoch.
Key Details
- Fox is one of the largest news media conglomerates in the world, with the most popular news channel in the U.S., and News Corp owns the Dow Jones, The Wall Street Journal, The New York Post, and HarperCollins Publishers. Rupert Murdoch is executive chairman of the two companies.
- Both companies reported on Tuesday that they received letters withdrawing the merger proposal, which would’ve combined them into one of the largest news media companies in the world.
- “In withdrawing the proposal, Mr. Murdoch indicated that he and Lachlan K. Murdoch have determined that a combination is not optimal for the shareholders of Fox and News Corp at this time,” says the letter.
- The decade-long merger attempt had faced internal criticism from investors and members of the Murdoch family. CNBC says the deal could’ve been worth as much as $3 billion.
Why It’s Important
As we previously reported, both parties announced the intention to merge this past October. Both companies, once partnered before 2013, were considering a merger that would allow them to refocus efforts on news and sports, save money, and open new business opportunities. The merger would’ve allowed the combined entity to benefit from a larger balance sheet and make more extensive and more aggressive acquisitions in the future, The Wall Street Journal notes.
News Corp shareholder Irenic Capital praised the decision, saying that the merger would not have served its goals and would have placed the company in danger, pending ongoing litigation at Fox. “This is the right decision. Looking ahead, News Corp has an opportunity to create substantial value for its owners,” says Irenic co-founder Adam Katz.
Fox’s future remains uncertain. The Murdock family owns a 42% stake in the company, but the 91-year-old head of the family is rapidly approaching the end of his career. It is expected that his son Lachlan Murdoch may inherit the company, but it remains unclear how he might steer it.
Notable Quote
“Protecting the future of titles of great sentimental and political value might have been a motivation shared by a few of those involved. Rupert Murdoch did not have convincing arguments for value add. Breaking up the News Corp stable will likely release more value for shareholders in due course. We are always sympathetic to protecting plurality, but it isn’t an argument the stock market has any time for,” Enders Analysis founder Claire Enders told The Guardian.
