“Disney will win the media bidding war,” said media expert Porter Bibb on the acquisition war of 21st Century Fox between Walt Disney and Comcast. Disney proposed 71.3 billion U.S. dollars (about 79 trillion won) for acquiring 21st Century Fox on Wednesday. As Disney took on 21st Century Fox’s debt worth 13.8 billion dollars (about 15 trillion won), the scope of transaction became as much as 85.1 dollars (about 94 trillion won).
Disney initially announced that it will acquire 21st Century Fox at 52.4 billion dollars (about 58 trillion won) but Comcast ignited fire over the bid war by proposing 65 billion dollars (about 72 trillion won). Then, with Disney raising its stake, the takeover price of Fox is skyrocketing.
The reason behind the two corporation’s heated efforts to acquire 21st Century Fox is lies in their sense of crisis in the media market. In order to compete with video streaming service entities such as Netflix or Amazon, they not only need contents but also a service that can send contents to mobile devices. Bibb stated that Comcast owns direct-to-consumer facing contents such as cable TV and wireless communication but Disney does not have such kind of service, which is the reason is why Disney wants 21st Century Fox more than Comcast. Disney is planning to expand its position in the market by internet video based on cable channel and “Hulu,” a streaming service, of which 21st Century Fox is a shareholder.
Since Comcast has not yet given up its acquisition ambition, there is possibility that the global telecommunications conglomerate could propose a price even higher than Disney. The situation, however, is not so rosy given that debt will also increase with the acquisition price. Moody’s, an international credit rating institution, has warned that the credit rating of Comcast may be degraded as its debt will increase upon acquiring 21st Century Fox.