Rupert Murdoch drops Fox-News Corp merger plan
Rupert Murdoch is no longer pursing a merger of Fox Corporation and News Corp, the companies announced Tuesday.
Why it matters: Wall Street was skeptical of the deal from the start, arguing the synergies between the two companies weren't obvious. An activist hedge fund didn't like it either, and openly campaigned against it.
The big picture: The deal proposal came as Murdoch, 91, was presumably looking to begin succession planning. His four children — Lachlan, Elisabeth, James and Prudence — are equal beneficiaries of a trust that own a 39% voting stake in News Corp. and a 42% voting stake in Fox Corp.
Details: The two sides were initially arguing that the deal could help drive synergies across sports betting and financial content. Investors argued the rationale didn't make much financial sense.
- Activist investor Irenic Capital, which owns around 2% of News Corp shares, was against the merger and has tried to pressure News Corp. instead to spin off Dow Jones or its real estate business instead of merging with Fox.
Catch up quick: In October, Both companies established special committees to look into a potential combination, following the receipt of letters from Murdoch and the Murdoch Family Trust.
- Murdoch separated the two in 2013 when he spun out News Corp assets, which include Dow Jones — which publishes the Wall Street Journal — and HarperCollins. Murdoch sold the majority of his Fox assets to Disney in 2019, retaining the broadcast TV assets including Fox News.