The European Commission has approved the $71.3 billion proposed acquisition of parts of Fox by Disney, in a conditional decision on full compliance with commitments offered by Disney.
Disney and Fox are two of the six major Hollywood film studios. Both companies are also providers of TV channels such as the Disney Channel, the Fox channels, the National Geographic channels and the History channels. In the European Economic Area (EEA), Disney and Fox are active as providers of audio-visual content and TV channels to TV broadcasters and distributors.
The proposed transaction would combine Disney and parts of Fox, including its film and television studios and its cable and international television businesses. The Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network are not part of the transaction.
The EC examined the effects of the proposed transaction on the markets where the activities of the two companies overlap.
In relation to (i) production and distribution of films for release in movie theatres and (ii) distribution of content for home entertainment and licensing of films and other TV content, the EC found that the combination of Disney's and Fox's activities would raise no competition concerns because the merged entity would continue to face significant competition from other players, such as Sony, Universal and Warner Bros.
In relation to the (iii) wholesale supply of TV channels, the European Commission found that the proposed transaction would have eliminated competition between two strong suppliers of "factual channels" in several EEA Member States. Factual channels are channels which mainly broadcast documentaries, drama and scientific-themed entertainment programmes, such as the National Geographic channels and the History channels.
To address the competition concerns, Disney committed to divest its interest in all factual channels it controls in the EEA, namely: History, H2, Crime & Investigation, Blaze and Lifetime channels. These channels are currently controlled by A+E Television Networks, which is a joint venture between Disney and Hearst.