Comcast Drops Bid for 21st Century Fox Assets

July 19, 2018

Comcast has thrown in the towel in the bidding war to snatch up assets of 21st Century Fox.

The cable giant announced on Thursday that it will instead focus on its bid for British broadcaster Sky.

The decision means Disney's $71 billion agreement to buy most of Fox can proceed unchallenged. Comcast had twice outbid the entertainment giant for those assets. It's last offer in June came in at $65 billion, and some reports suggested bidding could go as high as $80 billion.

"Our focus now is on completing the regulatory process and ultimately moving toward integrating our businesses," said Disney CEO Bob Iger in a statement about the move.

Comcast CEO Brian Roberts said, "I’d like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company."

The two companies were vying for Fox's film and TV studios, the networks FX and NatGeo, and its stakes in Hulu, India's Star network, andーto complicate thingsーSky.

Fox currently holds a 39 percent stake in Sky and last week offered to buy the rest in a deal that value the company at $32.5 billion. Comcast responded with an all-cash bid of $34 billion, 12 percent higher than what it first offered in February.

"Sky is clearly a crown jewel, you see all this competition for it," said Wall Street Journal reporter Keach Hagey. "It's something that would really give Comcast exposure to international markets, which they don't have. It would be massive for Comcast."

But UK regulators gave Fox the green light last week, which could mean the company would ultimately go to Disney.

A Wall Street Journal report Wednesday suggested Disney might be willing to do without Sky if it meant avoiding a continued bidding war for Fox. Whether it's willing to sustain a battle for Sky is still a question.

Either way, the merger would further increase competition in the crowded streaming market, said Hagey, author of "The King of Content." Disney announced plans last year to create its own streaming service, which would likely include Fox's content.

"You already have to subscribe to four or five services if you want to watch the show that people are talking about at the water cooler," Hagey said. "It's going to only become more fragmented."

Disney and Fox shareholders are set to vote on their proposed combination on July 27th. The Justice Department approved the deal in late June.

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