Rupert Murdoch drops plans to merge Fox and News Corp

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Rupert Murdoch SCRAPS plans to merge Fox and News Corp after shareholder protests: Merger would have reunited media empire he split a decade ago

  • Murdoch on Tuesday withdrew plans to merge Fox Corp and News Corp
  • The merger would have united the two parts of Murdoch’s media empire
  • But 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 abandoned plans to combine Fox Corp and News Corp, a deal that would have united the two halves of the media empire he split nearly a decade ago.

Murdoch sent a letter to the two companies withdrawing his proposal to bring them together, according to a regulatory filing on Tuesday.

He said he and his son, Fox Corp CEO Lachlan Murdoch, determined the combination was “not optimal for shareholders.”

Prominent News Corp shareholders had criticized the proposed merger, arguing it would undervalue the company, which owns 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 dropped plans to merge Fox Corp and News Corp, saying he and his son Lachlan Murdoch determined the combination was ‘not optimal for shareholders’

The Murdoch family trust controls about 40% of the voting rights of Fox and News Corp.

Spokespersons for both companies declined to comment further when contacted by DailyMail.com.

In a memo to staff on Tuesday, which was obtained by DailyMail.com, News Corp CEO Robert Thomson said whether or not the merger proceeds would have “no impact on our current operations.”

“We must resolutely focus on building the premium publishing, news, entertainment, intelligence and real estate products that have been the catalyst for our record earnings over the past two years,” Thomson wrote.

Murdoch first proposed the merger in October, which would have reduced overhead and unified the leadership of his divided media empire.

Over the decades, Murdoch built a vast publishing and entertainment empire, transforming an Australian newspaper company into a global media company that included newspapers, book publishing, film, television and news. .

After years of expanding globally, Murdoch split his empire in 2013, placing the printing business under newly created state-owned entity News Corp and television and entertainment under 21st Century Fox.

Prominent News Corp investors slammed the proposal, arguing it would undervalue that company's stock

Prominent News Corp investors slammed the proposal, arguing it would undervalue that company’s stock

Fox Corp owns Fox News, Fox Business and Fox Sports, having spun off its film and TV studio assets in a $71.3 billion sale of Twenty-First Century Fox to Disney in 2019

Fox Corp owns Fox News, Fox Business and Fox Sports, having spun off its film and TV studio assets in a $71.3 billion sale of Twenty-First Century Fox to Disney in 2019

At the time of the breakup, it was thought it would generate more shareholder value, a person familiar with the decision-making told Reuters in October.

But the media landscape has changed dramatically in the years since Murdoch spun off his media holdings, with tech companies such as Apple and Amazon playing big roles in distribution and bidding for sports rights.

It made sense, in this context, to bring Fox and News Corp together to create a company with complementary assets and greater scale, said the person familiar with the proposal.

The combined companies would have had about $24 billion in revenue.

However, the merger was met with opposition from major shareholders, including Independent Franchise Partners, one of the major shareholders of 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 a breakup of News Corp.