Murdoch proposes merger between Fox and News Corp

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Rupert Murdoch wants to merge Fox with News Corp, a deal that would bring together the television group that owns the cable channel Fox News with the owner of newspapers like The Wall Street Journal.

The 91-year-old media mogul has proposed combining the two companies in an equity deal, in a move to gain scale in a highly competitive and consolidated media landscape.

Fox and News Corp’s boards of directors have discussed a deal in recent weeks and created special committees of independent directors to evaluate the merger, people familiar with the matter said.

It is unclear who would lead the combined group. Lachlan Murdoch, Fox’s chief executive and Rupert’s eldest son, is believed to be in the lead, a person close to the lawsuit said. Fox has a market capitalization of $17 billion, compared to News Corp’s $9 billion.

The move comes 10 years after Murdoch decided to split his empire, saying at the time that his stakes in newspapers and television assets would be better managed as separate entities.

But in the last decade the internet has transformed the media business and the industry has taken hold. Murdoch sold most of his Fox assets to Disney in 2019, turning the remaining group into a small fish in a conglomerate sector. Facing competition from the world’s biggest companies — Amazon, Netflix, Apple and Google — Murdoch is trying to gain scale, people familiar with the matter said.

The Murdochs see opportunities for collaboration between news brands Fox and News Corp, including Fox Business, Fox News, Wall Street Journal, Barron’s and MarketWatch.

They also see an opportunity to strengthen their sports betting business by joining News Corp’s newspaper coverage with Fox’s sports television channels, these people said.

In an internal email, News Corp told employees it had received letters from Murdoch and the Murdoch family fund. According to the statement, its board is evaluating the combination, but “has not made any decisions at this time.”

The Wall Street Journal was the first to report that Murdoch was considering the merger. Until last year, there were legal obstacles to any reconfiguration of the Murdoch empire. As part of the terms of the 2019 sale of most of Fox’s assets to Disney, Murdoch was barred from selling further assets for two years. This restriction ended in March 2021.

Murdoch retains command of the family fund, which controls voting shares in News Corp and Fox. When he dies, the power to determine the fund’s position will be distributed evenly among his four eldest children, while his two youngest daughters – Grace, 20, and Chloe, 18 – will be beneficiaries. This means that for a decision to be made, at least two or three siblings will need to agree.

Fox owns the cable news channel of the same name as well as local television stations, while News Corp owns newspapers such as the Sun in the UK and the Wall Street Journal in the US.

Translated by Luiz Roberto M. Gonçalves

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