Rupert Murdoch, in an undated picture AFP / LEON NEAL
Communications tycoon Rupert Murdoch has reversed plans to merge News Corp, which he runs, with Fox Corporation, which owns, among other things, conservative television station Fox News. The Australian-born American businessman announced the decision to his media group’s board of directors on Tuesday, who informed the Securities and Exchange Commission (SEC). As a result, both companies’ special committees tasked with evaluating the approach were dissolved. The botched merger would have reunited a divided media empire almost a decade ago.
The news will see President Joe Biden’s administration, which has turned the antitrust fight into a workhorse, but most notably prominent News Corporation shareholders very critical of the merger. According to the document filed with the SEC, both the magnate and his son Lachlan Murdoch, CEO of Fox Corporation, believe the combination of both companies is “not optimal” for shareholders. Both companies are listed on Wall Street’s Nasdaq Technology Index.
The news has rocked the media landscape in the US, UK and Australia, News Corp.’s strongholds. As 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 pure media business – newspaper publishing – amid a wiretapping scandal involving the British weekly News of the World that split Murdoch’s empire in two in 2013. The position of Murdoch’s heirs, members of the Murdoch Family Trust, is also crucial in the wake of frustrated restructuring maneuvers at the trading center, according to the Financial Times newspaper.
The exploration of the merger by independent financial advisors hired by the two companies has lasted barely three months since Patriarch Murdoch announced his plans in mid-October. The identities of these experts have not been disclosed, although among News Corp’s independent directors is former Spanish government president José María Aznar.
The powerful Rupert Murdoch, 91, is 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 worth just over $9.1 billion, and 42% of Fox, which has a market cap of about $16.8 billion. In the hypothetical event of a stock swap resulting from the merger, the Murdoch family would have continued to control approximately 40% of the capital of the combined company, according to October market data.
The two companies publish some of the most influential media in the Anglo-Saxon market. The bible of business information on this side of the Atlantic, the Wall Street Journal is owned by News Corp. Since December, the paper has had its first director, Emma Tucker, a Brit from London’s Sunday Times. News Corp acquired Wall Street newspaper in 2007 after ending up with publisher Dow Jones.
The proposed merger between News and Fox Corp also caused some uneasiness in the Wall Street newspaper editorial board due to the emphatic conservative stance of Fox Corp’s main claim, the prime-time television network Fox News, 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 publisher HarperCollins breathed a sigh of relief after a US judge vetoed Penguin Random House’s purchase of competitor Simon & Schuster. Fox, which is more focused on entertainment, has other television channels and online service Tubi.
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