Disney, Fox Carved Out Assets 'Surgically', US Antitrust Chief Says

Walt Disney Co’s (DIS.N) $52.4 billion deal to acquire most of Twenty-First Century Fox Inc’s (FOXA.O) assets was “surgically” structured on good advice to be submitted to regulators, Makan Delrahim, assistant attorney general for the U.S. Department of Justice’s antitrust division, said on Thursday.

“We will see what the investigation shows. (Disney) didn’t propose to acquire Fox Sports 1 and 2. They didn’t acquire Fox Broadcasting and say, you know what, we will combine this with ABC and don’t worry about it we’ll have an arbitrator decide if prices for advertisers go up or competition for content creators goes down,” Delrahim told The Deal’s annual corporate governance conference in New York.

“They had good advice and carved out surgically ... a transaction that might be doable. But again, who knows where that transaction leads,” Delrahim added.

Antitrust considerations have become especially important as Fox prepares to weigh a rival offer for the assets Disney agreed to buy last December. Comcast Corp (CMCSA.O) said last month it was preparing an offer for the Fox assets that would top the deal with Disney.

A regulatory filing in April showed that Comcast offered to acquire Fox’s assets for $64 billion last November, before it agreed to sell to Disney. Fox rejected Comcast’s offer, even though it was higher, partly because it was concerned it faced a greater risk of regulators shooting it down.

Comcast is waiting to see if a U.S. federal judge will allow AT&T Inc’s (T.N) planned $85 billion acquisition of Time Warner Inc (TWX.N) to proceed before submitting its new offer to Fox, sources have said.

The Department of Justice has sued to block that deal, and Fox has cited the lawsuit as a reason why a tie-up with a cable operator such as Comcast could irk regulators.