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Disney told to offload factual assets

The European Commission (EC) has approved The Walt Disney Company’s US$71.3bn acquisition of key 21st Century Fox assets, on condition it divests its interest in certain TV channels due to competition concerns.

The EC found that the combination of Disney and Fox’s feature film activities does not raise concerns around competition, as the merged unit will still face “significant” competition from the likes of Sony, Universal and Warner Bros.

However, it has found that the deal, agreed earlier this year, will eliminate competition “between two strong suppliers of factual channels in several European Economic Area (EEA) member states.”

Disney currently operates A+E Television Networks in Europe as a joint venture with Hearst, while the deal with Fox will also see it control factual businesses such as National Geographic, which has a European footprint.

As a result, the EC has said Disney must divest its interest in the A+E Television Networks’ factual channels History, H2, Crime & Investigation, Blaze and Lifetime in Europe.

This would remove the overlap between Disney and Fox’s activities in the wholesale supply of factual channels in the EEA, the EC added.

The EC’s final decision is conditional upon Disney’s full compliance with the commitments.

Disney received the go-ahead to acquire the entertainment assets of 21st Century Fox, which also include its stake in streamer Hulu and properties such as The Simpsons, from the US Department of Justice in June.

Regulatory approvals are the remaining hurdles for the deal after Fox agreed to sell its stake in European pay TV broadcaster Sky to Comcast, which lost out in the fight for the 21st Century Fox entertainment assets but outbid Fox for Sky.

China is expected to clear the deal without conditions, DealReporter said last week, while Brazil’s regulator sought more information on the merger in September.

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