Rupert Murdoch mulls new merger of Fox Corp, News Corp

Rupert Murdoch has finalized his divorce from his fourth wife, Jerry Hall, in August. But the two halves of his business empire are exploring a union.

News Corp., which owns publishing titles including the Wall Street Journal, New York Post and London tabloid Sun, and Fox Corp., which encompasses Fox News and Fox Sports, said late Friday they were exploring a eventual merger at the behest of Murdoch and his family’s trust.

The two companies said they have each formed a special committee to review the proposal.

The Murdoch Family Trust owns around 40% of the voting shares in News Corp and Fox Corp – and any combination would amount to some sort of corporate meeting.

The two entities shared a governance structure until an organized split in 2013 in response to a major scandal that rocked some of Murdoch’s London newspapers. Revelations that their journalists had hacked into the voicemails of celebrities and other tabloid targets prompted overlapping criminal and civil investigations and government inquiries that exposed systemic corruption in the UK tabloid industry – a threat potential for Murdoch’s empire.

At the time, Murdoch touted the split as a move that “would allow each company and its division to recognize their full potential – and unlock even more long-term shareholder value.”

But it came with a measure of Murdoch family drama. Rupert Murdoch’s youngest son, James, quit as CEO of their European and Asian businesses, including the London tabloids. He eventually became CEO of entertainment company 21st Century Fox. But he ended up clashing with the business strategy of his older brother, Lachlan, who had been elevated to the position of executive co-chairman of the company.

Eventually, their father decided to take the business he had spent his life building out of their mutual conflicts.

In 2019, the Murdochs completed a $71.3 billion sale of most of 21st Century Fox — which also included cable network FX, Fox label Searchlight and National Geographic properties — to Disney.

While James Murdoch left his management role with the sale, Lachlan elected to stay on and run the parts of the business that remained under Murdoch’s control, including Fox News, Fox Television Channels and Fox Sports. In the summer of 2020, James left the family business completely, acknowledging “disagreements over certain editorial content published by corporate media and certain other strategic decisions” – a statement seen as his comment on Fox News’ increasingly conservative lean.

Lachlan Murdoch told Fox investors in 2019 that the family had no plans to merge the companies, but Rupert Murdoch has raised the possibility of bringing them together in recent weeks, according to people who have spoken to him directly and who have requested anonymity to discuss private conversations.

The elder Murdoch told those people he believes a merger would give the combined companies greater ability to negotiate and do business with behemoths such as Netflix, Amazon and Disney.

In its announcement, News Corp. said the special committee “has not made any decision regarding such a potential combination at this time, and there can be no certainty that the company will enter into such a transaction.” Both companies said they did not intend to comment further.

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