The Chinese authorities allowed Disney to buy Fox. This will accelerate the agreement.
Walt Disney's giant media will be able to become Fox Fox of the 21st Century ahead of time thanks to the help of Chinese authorities. They approved a $ 71.3 billion agreement. Now Disney has any obstacles to take over.
Photo: user Ryutaro Koma from flickr.com
Walt Disney Company has received official authorization from the Chinese authorities to acquire 21st Century Fox assets, according to The Wall Street Journal. The analysts were afraid that China would delay giving a license or refusal to confirm the bargain entirely due to tensions with the US.
China could use its ability to suspend a $ 71.3 billion agreement to put pressure on the US, but did not, says the article. Now, Disney has no barriers to absorbing a competitor. Lead analyst Amarkets Artem Deev has been a great news that could be a long-term growth catalyst for Disney and the 21st Century Fox.
"If China's antitrust regulator banned the deal, the entertainment industry would be at risk," said Deev. – This is a key Disney market, thanks to almost all products from the Marvel industry as a huge success and collect huge money in film distribution. Our recommendation is to buy stocks. The increase in the capitalization of Disney will be facilitated by the inevitable increase in revenue from the entire film industry sector, thanks to the Marvel characters. "
"Otkritie Broker" analyst Timur Nigmatullin gave a more limited assessment: according to him, no other scenario is expected, so the agreement will not affect the quotations. "China is important but far from the key part of Disney's business," Nigmatullin is convinced. – In my opinion, Europe and the US are more important. Asia and the Pacific account for less than 10% of revenue, but this is the fastest growing segment. "
"Earlier, we recommended buying a Disney paper, but the target price was almost arriving and now we recommend holding the paper," the analyst stopped. Otkritie Broker's representative did not recommend investing in the 21st Century Fox papers.
Consensus prospects of Refinitiv expect Disney to contribute to growth by 5.12%, and the 21st Century Fox – by 2.86%. Most analysts recommend buying the securities of both companies.
Under the terms of the agreement, Disney is going to a movie studio, including Twentieth Century Fox, Fox Searchlight Pictures and Fox 2000, as well as TV assets Twentieth Century Fox, FX Productions and Fox21, including the animated series The Simpsons. Prior to the redemption, Fox will allocate Fox Broadcasting, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network to a new company that will set its shares on the exchange.
Anton Pogorelsky, Sangalova Inga.