Rupert Murdoch SCRAPS plans to merge Fox and News Corp after shareholder protests: The merger would have reunited the media empire he split up a decade ago
- Murdoch on Tuesday withdrew plans to merge Fox Corp and News Corp
- The merger would have reunited the two parts of Murdoch’s media empire
- However, shareholders had criticized News Corp’s valuation as part of the deal
- News Corp owns The Wall Street Journal while Fox owns Fox News
Rupert Murdoch has scrapped his plan to merge Fox Corp and News Corp, a deal that would have reunited two halves of the media empire he divided nearly a decade ago.
Murdoch sent a letter to the two companies withdrawing his proposal to recombine them, according to a regulatory filing on Tuesday.
He noted that he and his son, Fox Corp CEO Lachlan Murdoch, have found the combination is “not best for shareholders.”
Prominent News Corp shareholders have criticized the merger plan, arguing that it would undervalue the company, which owns the New York Post and Wall Street Journal publisher Dow Jones.
Fox Corp owns Fox News, Fox Business and Fox Sports, having spun 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 merge Fox Corp and News Corp, saying he and his son Lachlan Murdoch have determined the combination is “not optimal for shareholders”.
The Murdoch family trust controls about 40 percent of the voting rights of Fox and News Corp.
Spokesmen for both companies declined to comment further when reached by .
In a memo to employees on Tuesday provided to , News Corp CEO Robert Thomson said there would be “no impact on our ongoing operations” whether or not the merger goes ahead.
“We must remain relentlessly focused on creating the world-class publishing, news, entertainment, information and real estate products that have been the catalyst for our record earnings for the past two fiscal years,” Thomson wrote.
Murdoch first proposed the merger in October, which would have reduced overhead and unified 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 spanning newspapers, book publishing, film, television and news.
After years of global expansion, Murdoch split his empire in 2013, placing the printing business under the newly formed public entity News Corp and television and entertainment under 21st Century Fox.
Prominent News Corp investors have criticized the proposal, arguing that it would undervalue the company’s shares
Fox Corp owns Fox News, Fox Business and Fox Sports, having spun off its film and television studio assets in a $71.3 billion sale of Twenty-First Century Fox to Disney in 2019
At the time of the split, it was thought it would generate more value for shareholders, a person familiar with the decision-making process told Portal in October.
But the media landscape has changed radically in the years since Murdoch segregated his media holdings, with tech companies like Apple and Amazon playing significant roles in distributing and bidding for sports rights.
In that regard, it makes sense for Fox and News Corp to reunite to create a company with complementary assets and larger scale, said the person familiar with the proposal.
The combined companies would have generated sales of approximately $24 billion.
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 a merger would have undervalued News Corp and said alternatives should be explored, including dissolving News Corp.