Why Disney (DIS) should spend $ 25 billion to buy a large piece of fox (FOXA) – tech2.org

Why Disney (DIS) should spend $ 25 billion to buy a large piece of fox (FOXA)


It seems that the general manager of Disney (DIS), Bob Iger, is still looking for an agreement before going to retirement.

The owner of ESPN and Disneyland has restarted talks with 21st Centry Fox (FOXA) to buy some of the badets of the media empire, according to a new report on Saturday The Wall Street Journal . According to reports, the talks focus on Twentieth Century Fox's film and television businesses, which are active abroad, such as Fox's 39% stake in Sky PLC and several cable networks in the United States. Fox News and the Fox broadcast network are not expected to be downloaded, according to WSJ .

Fox and Disney immediately responded to requests for comments.

As TheStreet reported in November, Comcast (CMCSA) has also shown interest in several of Fox's badets.

Why this deal with Disney will likely be made

Ultimately, Disney's renewed interest in Fox should not come as a surprise. Well, that's if one attended this week's The Deal Economy conference and heard TheStreet founder Jim Cramer turn on the microphone with his Top 12 Takeover Targets for 2018.

"The properties of Twenty First Century Fox Inc. of sports and Walt Disney Co. will buy the news, "said Cramer, badigning a price of at least $ 25 billion. It would arrive when Disney faces the diminution of the value of one of its main badets in ESPN. Buying Fox's multimedia badets would give Disney the largest scale necessary to compete in the era of Netflix cable cutting (NFLX).

But do not have the ink to dry in this mega-deal until the federal courts die AT & T Inc. (T) and Time Warner Inc. (TWX) deal. "I tell him that at this time the Justice Department is going to lose that case," Cramer said. "I think Fox [deal] does it," he added. "Motivated buyers, motivated sellers".

  The CEO of Disney, Bob Iger.
The CEO of Disney, Bob Iger.

Where does the motivation for this deal come from?

Even if Disney does not get its prize before the end of the year, 2018 is a real possibility. In fact, next year could be another hot year for mergers and acquisitions.

"There are too many companies competing for the same revenue stream in the same sector," Cramer explained.

Some offers (such as Disney being explored by Fox), said Cramer, are being made to fend off the advance of commercial models of FANG names, or Facebook Inc. (FB), Amazon.com Inc. (AMZN), Netflix Inc and Alphabet Inc. (GOOGL). As these heavyweights continue to flex their muscles, the one-time headlines have no choice but to merge.

Other offers will find their genesis in an impulse to decrease dependency on other parts or to get more and more shelf space in the supermarket. For others, the negotiations may be driven by the need to boost shareholder value, while even more will be the work of "aggressive insurgents," Cramer said.

Walmart (WMT), for example, will likely remain aggressive on the offer front next year in an attempt to defend against Amazon.

"We try to build above all the badortment, a customer seeks us not only value but wants to have a wide selection," Walmart CEO Doug McMillon told TheStreet (see below) when asked what he's looking for . for on the deal front. "We are focused on occupied families, so that mothers are important, we want to facilitate every day the families occupied."

Regardless of the motivation, the big problem is still alive and moving by 2018.

Facebook, Alphabet and Comcast belong to Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Do you want to receive an alert before Cramer buys or sells these shares? Get more information now.

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