Rupert Murdoch is exploring options to recombine his Fox Corp and News Corp businesses, putting back together a media empire that he split in 2013.
Both companies have set up special committees of independent directors to study a potential deal and evaluate possible terms, according to statements they put out late Friday. There’s no certainty an agreement will be reached, the companies said.
Discussions involve an all-stock merger that would require approval by a majority of the non-family shareholders, according to people familiar with the negotiations who asked not to be identified because the talks are private. Murdoch initiated the discussions, one of the people said.
A combination would involve cost savings, the people said. It could also result in more opportunities to promote new businesses, such as sports betting, across a broader array of media outlets, including print, TV and online.
Both companies have changed dramatically since their split almost a decade ago. Fox sold most of its entertainment assets to Walt Disney Co. in 2019 and is largely focused on broadcasting and cable television, led by the Fox News Channel. It also owns the Tubi streaming service. News Corp., owner of the Wall Street Journal, has diversified into new areas like online real estate services. The Journal broke the news of the deliberations earlier on Friday.
The Murdoch family has about a 39% voting stake in News Corp. and approximately 42 percent of Fox, filings show. Murdoch’s company was called News Corp. for decades. If the merger is successful, it’s likely the business keeps that name, one of the people said.
Murdoch, 91, is executive chairman of News Corp. and chairman of Fox. He started building the global media giant from a single newspaper in Australia. Along the way he acquired the Fox film studio and launched the Fox broadcast network. Other acquisitions included Dow Jones & Co., publisher of the Wall Street Journal, in 2007, as well as some of Britain’s most-read newspapers.
The newspaper business began to collapse in the digital age, however, with publications losing much of their advertising to online outlets. The separation of the company’s print and entertainment businesses in 2013 allowed investors to independently value the faster-growing cable-TV business, including channels such as Fox News, FX and Nat Geo.
More recently, cable TV has been challenged by streaming services such as Netflix Inc that are drawing away millions of viewers. After failing in an attempt to bulk up by acquiring Time Warner in 2014, Murdoch ultimately decided in 2017 to sell his entertainment assets to Disney.
At the same time, News Corp. began to show renewed vigor, with the Wall Street Journal growing again thanks to online subscriptions. Acquisitions, such as Realtor.com, opened up new sources of profit.
Uniting the two businesses could give the Murdochs a broader portfolio of opportunities in which to invest. Fox has a market capitalization of about $16.7 billion, while News Corp. is worth about $9.14 billion.
It would also potentially consolidate power for Rupert’s son Lachlan, 51, who is News Corp.’s co-chairman. He is also executive chairman and chief executive officer of Fox.
Bloomberg News competes with News Corp.’s Dow Jones and Wall Street Journal in providing financial news and information.
News Corp. shares rose 6.5 percent to $16.61 in extended trading. Fox was down 1.7 percent to $31.
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