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    This ppt explains the valuation and the process how merger took place between disney and 20th century fox

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    Disney fox merger

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    This ppt explains the valuation and the process how merger took place between disney and 20th century fox

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    2K views16 pages

    Disney Fox Merger

    Uploaded by

    Kunal Dhanuka
    This ppt explains the valuation and the process how merger took place between disney and 20th century fox

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 16

    WALT DISNEY: WHAT DOES THE FOX SAY ?

    PRESENTED BY: GROUP 1


    MAHARSHI BHATT 180201023
    PRANAV GARG. 180201031
    SHIVAM ARORA 180201040
    SWAPNIL GARG 180201047
    KUNAL DHANUKA 180201121
    SIDDHARTH DHANANIA 180201144
    ACQUIRER TARGET
    DISNEY’S BUSINESS PLAN

    Media and entertainment industry with CAGR 4.4%


    INDUSTRY/MARKET With Market over $720 billion
    DEFINITION Products offered by Disney – Disney Studios, Parks
    and resorts, consumer product.

    Using our portfolio of brands to differentiate our


    content, services and consumer products, we seek
    DISNEY’S MISSION to develop the most creative, innovative and
    profitable entertainment experiences and related
    products in the world.

    Product Development
    BUSINESS STRATEGY Market Penetration
    Diversification
    SWOT ANALYSIS

     Strengths  Opportunities
     Brand Image  Disney Stores & Expansions
     Diversified Business  Disney Park Establishments
     Global Presence  Disney+ : Disney’s Streaming Service

     Weakness  Threats
     Weak Online Presence  Local Competition
     Target Audience  Technology being a hindrance
     Old Cartoon Characters  Cultural dominated cartoon preferred more
    ACQUISITION PLAN

    Specific Purpose of the Acquisition

    • Increasing distribution channels


    • Expanding market share
    • Technological advancement

    Potential Targets

    • 21st Century Fox


    • Sony
    • Viacom, Inc

    Key Objectives in Acquiring 21st Century Fox

    • 40% Box office market share which equivalent to $4.6 Billion.


    • Company ‘Digital future’ would be more strengthened.
    • Gain control on number of new superhero franchisees, which will fledge out Disney’s existing portfolio.
    TIMELINE

    November 2017 December 2017 June 2018 October 2018 – March 20, 2019
    January 2019
    Disney begins talks with Disney announces an all- Comcast rejoins bidding Fox receives approval The deal was officially
    Murdoch family stock $52.8 billion offer. and formally submits a from various regulatory completed.
    Comcast & Verizon join Comcast drops out of the $65 billion, all cash offer, bodies globally, Brazil &
    the bidding process as bidding process. targeting the same Mexico being last major
    well. assets as Disney. hurdles.
    Disney and Fox agree to
    a new $71.3 billion deal,
    50/50 cash-stock split.
    DoJ approves the sale,
    contingent that Disney
    divest from Fox’s RSNs.
    Valuation of Walt
    Disney
    Valuation of 21 Century
    Fox
    Consolidated
    Valuation
    Value of Walt Disney = $186 Billion

    Value of 21 Century Fox = $41 Billion


    PURCHASE
    OFFER Consolidated Value = $272 Billion
    ESTIMATE
    So the offer price should be in the
    range of $41 Billion to $86 Billion.
    Consider a premium of $10 Billion,
    Disney should offer somewhat around
    $51-53 Billion.
    NEGOTIATIONS & FINAL OFFER

     Initial Offer by Disney: $52.4 billion


     Comcast’s counter bid of $65 billion, all cash, inflated the
    price.

    Final Offer
     Total Transaction Price : $85.2 billion
     $71.3 billion (50/50 cash-stock split)
     Assumed Debt: $13.8 billion
     New $38 per share acquisition gives 21st Century Fox
    shareholders option to either elect cash or stock in the
    the combined entity.
    SYNERGIES

    Operating • Disney estimates to yield at least $2 billion in cost synergies by 2021


    through the combination of businesses.
    Synergies
    • Disney has a lower cost of capital than Fox, thus enabling Disney to
    Financial Synergies get a better return on the acquired assets.

    • Disney, through the acquisition gains rights to various superhero


    Intellectual Property franchisees which add to Disney’s existing portfolio making the total
    greater than the sum of parts.

    Controlling Stake in • The acquired 30% stake gives Disney a controlling stake in Hulu.
    Hulu
    INTEGRATION PLAN & RISKS

    Post acquisitions, a greater percentage of Disney’s assets will be


    based in the movie and television industry, at a time when the
    industry is facing various challenges.
    By this deal, Disney will gain control over Hulu, which is currently
    not making any profits and has a significant burn rate.
    Due to this being a horizontal merger, a lot of HR redundancies are
    expected. An estimated 4000 employees might face layoffs due to
    the deal.
    Considering the size and scale of both Disney and Fox, the deal had
    the potential to be scrutinized by various anti-trust regulatory
    bodies.
    THANK YOU

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