Rupert Murdoch scraps plan to combine Fox and News Corp
Rupert Murdoch’s SCRAPS plan to combine Fox and News Corp after shareholder protests: Merger would have reunited media empire he split a decade ago
- Murdoch on Tuesday withdrew his plans to combine Fox Corp and News Corp
- The merger would have reunited the two parts of Murdoch’s media empire.
- But shareholders had criticized News Corp’s valuation under the deal.
- News Corp owns the Wall Street Journal, while Fox owns Fox News
Rupert Murdoch has scrapped his plan to combine Fox Corp and News Corp, a deal that would have reunited the two halves of the media empire he split nearly a decade ago.
Murdoch sent a letter to the two companies withdrawing his proposal to reunite them, according to a regulatory filing filed Tuesday.
He said he and his son, Fox Corp CEO Lachlan Murdoch, had determined that the mix was “not optimal for shareholders.”
Prominent News Corp shareholders had criticized the merger plan, arguing it would undervalue News Corp, which owns the New York Post and the Wall Street Journal’s Dow Jones publisher.
Fox Corp owns Fox News, Fox Business and Fox Sports, after spinning off its movie and television studio assets in a $71.3 billion sale of Twenty-First Century Fox to Disney in 2019.
Rupert Murdoch has scrapped his plan to combine Fox Corp and News Corp, saying he and his son Lachlan Murdoch had determined the combination is “not optimal for shareholders.”
The Murdoch family trust controls about 40 percent of the voting rights of Fox and News Corp.
Spokesmen for both companies declined to comment further when contacted by DailyMail.com.
In a memo to staff on Tuesday, which was obtained by DailyMail.com, News Corp CEO Robert Thomson said that whether or not the merger went ahead would have “no impact on our current operations.”
“We must firmly focus on creating the premium publishing, news, entertainment, intelligence and real estate products that were the catalyst for our record profits in the past two fiscal years,” Thomson wrote.
Murdoch in October first proposed the merger, which would have reduced overall costs and unified the leadership of his divided media empire.
Over decades, Murdoch built a vast publishing and entertainment empire, transforming an Australian newspaper company into a global media company that included newspapers, book publishing, film, television and news.
After years of global expansion, Murdoch split his empire in 2013, placing the printing business at the newly created public entity News Corp and television and entertainment at 21st Century Fox.
Prominent News Corp investors have criticized the proposal, arguing that it would undervalue the company’s shares.
Fox Corp owns Fox News, Fox Business and Fox Sports, after spinning off its movie and television studio assets in a $71.3 billion sale of Twenty-First Century Fox to Disney in 2019
The thinking at the time of the breakup was that it would create more value for shareholders, a person familiar with the decision-maker told Reuters in October.
But the media landscape has changed radically in the years since Murdoch spun off his media holdings, with tech companies like Apple and Amazon playing major roles in distributing and bidding for sports rights.
It made sense, in that context, to bring Fox and News Corp together to create a company with complementary assets and larger scale, said the person familiar with the proposal.
The combined companies would have had about $24 billion in revenue.
However, the merger faced opposition from major shareholders, including Independent Franchise Partners, one of the largest shareholders in both companies, as well as Murdoch himself.
The London-based investment firm argued that a merger would have undervalued News Corp and said alternatives, including breaking up News Corp, should be explored.