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Disney’s Acquisition of Fox: Where Does It Rank Among All-Time Deals?

January 18, 2018    //   By Richard Peterson

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
1999 204.3 747 114.4% 46.2%
2000 269.6 707 32.0% -5.4%
2001 95.9 573 -64.4% -19.0%
2002 39.6 403 -58.7% -29.7%
2003 32.7 472 -17.4% 17.1%
2004 44.9 566 37.3% 19.9%
2005 64.9 616 44.5% 8.8%
2006 98.1 753 51.2% 22.2%
2007 63.9 839 -34.9% 11.4%
2008 12.3 597 -80.8% -28.8%
2009 55.3 563 349.6% -5.7%
2010 19.3 670 -65.1% 19.0%
2011 22.6 685 17.1% 2.2%
2012 46.2 834 104.4% 21.8%
2013 67.4 691 45.9% -17.1%
2014 102.3 806 51.8% 16.6%
2015 121.3 799 18.6% -0.9%
2016 138.1 659 13.8% -17.5%
2017 125.6 753                                 -9.1%              14.3%
 

 

Source:  S&P Capital IQ, an offering of S&P Global Market Intelligence
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