Comcast made an announcement this week that it will drop out of the race to acquire Rupert Murdoch’s 21st Century Fox’s entertainment assets.
The company stated, “Comcast does not intend to pursue further the acquisition of the 21st Century Fox assets.”
Comcast will instead put its efforts into attempting to purchase British media and pay-TV company, Sky.
Comcast bid $65 billion for some of 21st Century Fox’s assets, while Disney recently bid $71 billion.
It was earlier this month that Comcast increased its bid for Sky which tops the previous offer that was made by 21st Century Fox, who owns 39% of the company.
Disney (NYSE:DIS) CEO Bob Iger said in a statement: “We’re extremely pleased with today’s news, and our focus now is on completing the regulatory process and ultimately moving toward integrating our businesses.”
Antitrust approval from the Justice Department is already secured so the transition is expected to go smoothly for Disney.
Comcast Chairman and Chief Executive, Brian Roberts, said, “I’d like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company.”
“This is one day going to make a fantastic scripted drama in and of itself… It has all the ideas: fear, greed (and) some empires flailing as they look to a new world,” Zach Fuller, media analyst at MIDiA Research remarked to CNBC.
Ian Whittaker, media equity researcher at Liberum, told CNBC’s “Squawk Box Europe” that pulling out for Comcast could be a warning message for Disney.
Whittaker stated, “The first thing is actually to suggest to Disney a division of the spoils. So essentially, to say you as Disney, you take Fox’s U.S. assets… we as Comcast actually take Sky, including the 39 percent stake that Fox currently owns.”
“The second thing is… It essentially sends a warning shot to Disney over Sky. It essentially says, ‘We pulled out of the bid for the assets of the U.S., we therefore have more firepower available. If you come back with a revised bid, we can actually go higher as well,’” he continued.
New Street Research analyst, Jonathan Chaplin, stated, “Fox and Sky were good, valuable assets worth pursuing, but … they weren’t necessary for Comcast. Walking away from the battle for Fox at this price we think supports the view that they are fine without it. It remains to be seen how Sky wraps up, but we think it is highly unlikely that they would bid up to a price that would suggest desperation.”