Rupert Murdoch SCRAPS plan to combine Fox and News Corp after shareholder protests: Merger would have reunited the media empire he split up a decade ago
- Murdoch on Tuesday withdrew plans to combine Fox Corp and News Corp
- The merger would have reunited the two parts of Murdoch’s media empire
- But shareholders had been critical of the valuation of News Corp 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 two halves of the media empire he split nearly a decade ago.
Murdoch sent a letter to the two companies withdrawing his proposal to re-unite them, according to a regulatory filing on Tuesday.
He indicated that he and his son, Fox Corp CEO Lachlan Murdoch, had determined that the combination is ‘not optimal for the shareholders’.
Prominent News Corp shareholders had been critical of the merger plan, arguing that it would undervalue that company, which owns the New York Post and Wall Street Journal publisher Dow Jones.
Fox Corp owns Fox News, Fox Business and Fox Sports, after spinning off its film 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 son Lachlan Murdoch had determined that the combination is ‘not optimal for the shareholders’
The Murdoch family trust controls roughly 40 percent of the voting rights of both Fox and News Corp.
Spokespersons for both companies declined to comment further when reached 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 forward would have ‘no impact on our current operations.’
‘We must focus steadfastly 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,’ wrote Thomson.
Murdoch in October first proposed the merger, which would have cut overhead 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, TV and news.
After years of expansion globally, Murdoch split his empire in 2013, placing the print business in newly created public entity News Corp and the TV and entertainment under 21st Century Fox.
Prominent News Corp investors have been critical of the proposal, arguing that it would undervalue shares of that company
Fox Corp owns Fox News, Fox Business and Fox Sports, after spinning off its film 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 generate more value for shareholders, a person familiar with the decision-making told Reuters in October.
But the media landscape has changed radically in the years since Murdoch separated his media holdings, with technology companies such as Apple and Amazon playing a significant role in distribution and bidding for sports rights.
It made sense, in that context, to reunite Fox and News Corp to create a company with complementary assets and greater scale, the person familiar with the proposal said.
The combined companies would have had around $24 billion in revenue.
However, the merger faced opposition from major shareholders, including Independent Franchise Partners, one of the largest shareholders in both companies, aside from Murdoch himself.
The London-based investment firm argued that a merger would have undervalued News Corp, and said that alternatives should be explored, including a breakup of News Corp.