Rupert Murdoch abandons the ‘dream’ of rebuilding his empire by bringing his two crown jewels, Fox and the Wall Street Journal. In fact, the tycoon renounces the wedding between Fox Corporation And News Corp following the skepticism of investors, worried by the outcome of the merger and above all convinced that it would not be able to realize the full value of the assets. The reverse was welcomed on Wall Street, where Fox shares managed to gain more than 7% in a session marked by a minus sign for American stock exchanges. The merger of News Corp and Fox “is not at the moment optimal for shareholders,” Murdoch and his son Lachlan said in the note announcing the dissolution of the special committee set up to evaluate the wedding.
The tycoon had initially proposed the union by announcing savings and the possibility of integrating some of the companies of the group, in order to respond also to the wave of consolidation that has swept the media industry in the last decade. “Size matters” for a company as it “offers flexibility,” he said Lachlan Murdoch in November, shortly after the presentation of the plan to reunite Fox and News Corp, separated 10 years ago to prevent the printed paper did not weigh on the growth of the division entertainment. Over the past decade, however, the internet has transformed the media industry, paving the way for consolidation and prompting Murdoch in 2019 to sell the majority of Fox’s entertainment assets to Walt Disney in a deal valued at 71.3 billion.
The hypothesis of a merger between Fox and News Corp has never convinced investors. In fact, many have raised doubts about the effectiveness of the operation, wondering if it weren’t better to go down other paths and if a merger would have brought equal benefits to both companies. According to some, News Corp would have emerged weaker and undervalued. Further complicating Murdoch’s plan was the performance of Fox and News Corp stocks on Wall Street since the announcement, and above all doubts about the impact this would have on the succession at the top of the two companies.
In recent weeks, moreover, the group CoStar he allegedly came forward and expressed his interest in buying News Corp’s stake in the real estate firm move at a valuation of about $3 billion. A proposal that was liked and translated into negotiations that became serious and which further convinced Fox and News Corp to abandon their plan, in a blow to Murdoch’s ambitions.