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Murdoch backtracks on his plans to reunify the two media companies he owns, News Corp and Fox Corp.

2023-01-25T00:38:36.798Z

In a statement to the US stock market regulator, the magnate stresses that the combination of both companies "is not optimal" for shareholders, some of them very critical.



Rupert Murdoch, in an undated image. AFP / LEON NEAL

Communications magnate Rupert Murdoch has reversed plans to merge the company he runs, News Corp, with Fox Corporation, which among other things owns the conservative Fox News television network.

The American businessman of Australian origin communicated the decision to the board of directors of his media conglomerate on Tuesday, which informed the Securities and Exchange Commission (SEC, in its English acronym, the US stock market regulator).

As a consequence, the special committees of both companies, in charge of evaluating the rapprochement, have been dissolved.

The botched merger would have reunited a divided media empire nearly a decade ago.

The news will please the Administration of President Joe Biden, which has made the antitrust fight a workhorse, but above all prominent shareholders of News Corporation, very critical of the merger.

According to the document sent to the SEC, both the magnate and his son, Lachlan Murdoch, CEO of Fox Corporation, consider that the combination of both companies "is not optimal" for shareholders.

Both companies are listed on Wall Street's Nasdaq Technology Index.

The news has shaken the media landscape in the US, UK and Australia, the strongholds of News Corp. A global company, it covers a wide range of media in all imaginable formats, digital, subscription video services in Australia, video services news and information and book publishing.

It was precisely the separation of the audiovisual and entertainment business from the purely media business -newspaper publishing-, in the midst of a wiretapping scandal involving the British weekly

News of the World

, which split Murdoch's empire in two, in 2013. In the now frustrated recomposition maneuvers of the emporium, the position of Murdoch's heirs, members of the Murdoch Family Trust, is also key, according to the

Financial Times

newspaper .

The exploration of the merger by independent financial advisers hired by the two companies has lasted barely three months, since patriarch Murdoch announced his plans in mid-October.

The identity of these experts was not revealed, although among the independent directors of News Corp is the former president of the Spanish Government, José María Aznar.

The powerful Rupert Murdoch, 91, is the executive chairman of News Corp and non-executive chairman of Fox. His son Lachlan, 51, is both co-chairman of News and chief executive of Fox, and his most likely successor.

The family trust controls about 39% of News Corp, a company valued at just over $9.1 billion, and 42% of Fox, which has a market capitalization of about $16.8 billion.

In the hypothetical case of a share swap resulting from the merger, the Murdoch family would have continued to control around 40% of the capital of the merged company, according to October market data.

The two companies publish some of the most influential media in the Anglo-Saxon market.

The bible of economic information on this side of the Atlantic,

The Wall Street Journal

, is owned by News Corp. Since December, the newspaper has had its first director, Emma Tucker, a British woman from London's

The Sunday Times

.

News Corp acquired the Wall Street newspaper in 2007, after landing at Dow Jones, the publishing company.

The proposed merger between News and Fox Corp also caused some discomfort in the Wall Street newspaper's editorial office due to the markedly conservative orientation of Fox Corp's main claim, the Fox News television network, the leader in prime time, pro-Donald Trump when he was in the White House and later, and the pulpit of the more extreme Republican faction, which otherwise generates most of the company's revenue.

News Corp's main assets are the Dow Jones company, which also owns

The Wall Street Journal

and a news agency;

News UK (publisher of

The Sun

and

The Times

), News Corp Australia, and the publisher HarperCollins, which breathed a sigh of relief after a US judge vetoed Penguin Random House's purchase of its rival Simon & Schuster.

Fox, more focused on entertainment, has other television channels and the

online

service Tubi.

Source: elparis

All business articles on 2023-01-25

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