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US Department of Justice clears Disney bid for Fox assets

The US Department of Justice (DoJ) has approved Disney’s bid for Fox assets, so long as it divests 21st Century Fox’s 22 regional sports networks.

A lawsuit was filed by the DoJ’s Antitrust Division to block the acquisition if the mouse house did not divest Fox’s sports assets. Approval was granted once Disney agreed to these terms.

Assistant attorney general Makan Delrahim of the Justice Department’s Antitrust Division, said: “American consumers have benefitted from head-to-head competition between Disney and Fox’s cable sports programming that ultimately has prevented cable television subscription prices from rising even higher,” said Makan Delrahim assistant attorney general of the Justice Department’s Antitrust Division.

“Today’s settlement will ensure that sports programming competition is preserved in the local markets where Disney and Fox compete for cable and satellite distribution.”

Disney said that it has worked “diligently” to provide the DOJ with all of the information it needed for the investigation of the transaction since announcing its acquisition intentions in December.

The settlement agreement still needs to be approved by a federal judge, but this is largely a pro forma step.

The move will be a blow to Comcast, which was reported to have been planning to bring in partners for more capital to up its initial US$65 billion offer.

21st Century Fox has said Disney’s deal would be “superior”. This week, the company also stated that a deal with Comcast would carry more regulatory risk than one with Disney.

Despite this, Fox board members still have a fiduciary responsibility to consider competing offers if they are significantly higher or more compelling than Disney’s deal.