As expos broke this week that 21st Century Fox Inc. (FOXA) is closing in on a act to sell its film studio and television production assets to Walt Disney Co. (DIS), one collaborate of analysts sees the $60 billion sale as a win-win for both centre giants.
In a research note Wednesday, analysts at Macquarie wrote that a supine merger wouldn’t encounter much regulatory resistance and would be thoroughgoing for both companies. (See also: Fox Favors Selling $60 Billion in Assets to Disney.)
As for Fox, the $63 billion global company controlled by the Murdoch kinsfolk, the investment firm indicated the deal would be in line with its larger heart on live content. After the deal’s close, Fox would be left with a U.S.-centric TV network proprietorship consisting of Fox News, Fox Sports, the Fox broadcast network and a number its local bus stations. Macquarie noted that the firm could use the new $60 billion in pre-tax liquidate to do “practically anything with.”
With the new assets, Disney should farther away from significant scale and distribution as it heads off against a growing number of new virtuosi including Netflix Inc. (NFLX), Amazon.com Inc. (AMZN) and Apple Inc. (AAPL). Supplementary, Macquarie wrote that owning a second major studio could relief Disney build out its direct-to-consumer business slated to launch in 2019. Increased ownership of well up platform Hulu should work to offset cable subscription debilities and give the company “a much bigger international TV presence at a time when its make equity is growing through its films and parks.”
Also this week, analysts at Piper Jaffray rescued a research note in which they were similarly bullish on the traffic and its ability to lift Disney by diversifying its revenue streams and increasing its highbrow property and market share. (See also: What a Disney, Fox Merger Could Niggardly for Netflix.)