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Fox and News Corp Explore Merger

Rupert Murdoch proposes a possible merger between Fox and News Corp, a deal that

would put assets including Fox News, The Wall Street Journal, the Fox broadcasting network and TMZ under the same corporate umbrella.

The move comes a decade after Murdoch’s decision to split the two firms, saying that they

were better off apart. The breakup plan was partly due to a phone-hacking scandal which

exposed the company to legal and financial risks. The 91-year-old media mogul added that

at that time, his newspaper holdings and television assets would be “better managed” as

separate entities.

However, the internet has transformed and consolidated the operation of the media industry. Moreover, Murdoch, in 2019, sold some of his biggest entertainment assets, including the 21st CenturyFox movie studio, to the Walt Disney Company. This leaves the remaining group relatively minor in the industry of conglomerates. Facing competition from tech giants like Amazon, Netflix, Apple and Google, Murdoch is looking to build scale.

The merged companies could potentially bring moneymaking and cost-saving opportunities. The Murdochs see opportunities for business news collaboration between Fox and News Corp including Fox Business, Fox News the Wall Street Journal, Barron's and MarketWatch. The deal could also reduce administration costs by hiring one management team and maintaining one set of relationships with vendors.

Fox has a stock market capitalisation of $17bn, compared to News Corp’s $9bn. The boards have established special committees of independent directors to evaluate the merger. The committees however have yet to make a recommendation about whether to combine.

Written by: Quynh Chi Le

Source: Financial Times

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