Disney’s Acquisition of Fox: Where Does It Rank Among All-Time Deals?
The recent announcement of The Walt Disney Company’s acquisition of various media assets of Twenty-First Century Fox, Inc. marked a key development for U.S. media industry M&A. The transaction for Disney was valued at $77 billion with the inclusion of the target’s assumed liabilities, ranking as its largest ever acquisition. Disney’s previous biggest ever deal, according to S&P Global Market Intelligence data, occurred in July 1995 when it purchased Capital Cities/ABC, Inc. for $19.7 billion. Also, the $77 billion Fox deal exceeds the aggregate disclosed value of all previous Disney acquisition. Based on S&P Global Market Intelligence data, the disclosed sum of prior Disney acquisitions totaled $49 billion. Furthermore, the Disney-Fox transaction ranks as the fourth-largest ever U.S. media industry M&A deal and the biggest since AT&T Inc.’s proposed $109 billion acquisition of Time Warner Inc. announced in October 2016.
Yet, despite the fact that U.S. media industry M&A deal proceeds in 2017 saw the fourth consecutive year of better than $100 billion in total disclosed deal value , a few yellow flags may be hovering. First of all, last year saw a decline in deal proceeds from 2016 levels. S&P Global Market Intelligence data shows total disclosed M&A deal value for transactions announced last to be $125.6 billion, down 9.1% from 2016’s total of $138.1 billion. That was the first year-over-year decline in deal value since 2010. Excluding the Disney-Fox deal, total announced U.S. media industry deal value last year was under $49 billion. Also, while the annual U.S. media M&A deal count was up in 2017 compared to 2016 totals, the 753 deals occurring last year were fewer than took place in both 2014 and 2015. Still, the 14.3% year-over-year increase in the media industry M&A deal count was the second-best showing in the past year five years. Finally, historically, some big media M&A announcements eventually were cancelled. Of the top ten all-time largest U.S. media M&A announcements, four of those proposed deals were scrapped including Comcast Corp. withdrawing in April 2004 its offer to acquire The Walt Disney Company in a proposed $67.7 billion transaction.
|Announced Media Industry M&A Transactions|
|Year||$Billions||Deals||YOY % change in deal proceeds||YOY % change in no. of deals|
|Source: S&P Capital IQ, an offering of S&P Global Market Intelligence|
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