The two sides of Rupert Murdoch’s media business, news corporation and Fox are considering a proposal to reunite nearly 10 years after their split, the companies announced Friday.
The Fox and News Corp. boards have set up committees to evaluate a possible deal, the companies said in statements. The committees have not made a decision on whether to combine.
The merger of Fox and News Corp. would represent a sea change for both companies, which told investors when they parted ways that the two firms were better off apart.
The breakup plan came in the wake of a wiretapping scandal at the British tabloid The News of the World, which exposed the company to legal and financial risks. Several other media conglomerates followed suit, spinning off their promising television businesses from their slower-growing print properties.
The deal, if it goes through, could bring a collection of news and entertainment assets including Fox News, The Wall Street Journal, the Fox broadcast network and TMZ under the same corporate umbrella.
In 2019, Murdoch sold some of his biggest entertainment assets, including the 21st Century Fox movie studio, to The Walt Disney Co. That was one of numerous media deals that took place to compete with tech giants like Meta. , owner of Facebook, and Alphabet’s. Youtube.
Lachlan Murdoch, Fox CEO and one of Rupert Murdoch’s sons, told Fox investors in 2019 that the companies would not meet.
Lachlan Murdoch, chairman of both companies, proposed the deal in the past two weeks, according to three people with knowledge of the talks. The Murdoch family trust, which has ownership interests in both companies, also backed the merger.
Murdoch sees potential opportunities to make money and save costs by joining the two companies. The new company could look for ways to integrate its media properties. He could also explore ways to use the company’s assets for emerging lines of business, such as sports betting. In 2019, Fox said it was joining forces with Stars Group, a gaming company, to launch a sports betting platform called Fox Bet.
The merged companies could potentially save money by hiring a management team and maintaining a set of vendor relationships, the people said.
The proposal would divide ownership among shareholders based on each company’s market value, four people with knowledge of the talks said. The proposal did not suggest a proposed relative valuation for companies.
The Wall Street Journal previously reported that News Corp. and Fox were weighing a deal.
Robert Thomson, CEO of News Corp., briefed employees on the proposed merger in an email Friday.
“At News Corp., we are constantly looking for ways to improve our performance and expand our business, and the turmoil in the media presents both challenges and opportunities,” he wrote in the email, which was seen by The New York Times.
“However, I would like to emphasize that the Special Committee has made no determination at this time, and there can be no certainty that any transaction will result from its assessment,” Thomson wrote.