Comcast challenges Disney for control of 21st Century Fox assets

The Twenty-First Century Fox sign outside of the News Corporation headquarters building in New York. Comcast says it’s considering making an offer to buy Twenty-First Century Fox, which would put it in a head-to-head bidding fight with Disney. (AP)
Updated 23 May 2018
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Comcast challenges Disney for control of 21st Century Fox assets

NEW YORK: A full-fledged bidding war for key assets of Rupert Murdoch’s 21st Century Fox erupted Wednesday as media and cable giant Comcast announced it plans an all-cash bid that would top an offer already on the table from Walt Disney Co.
Comcast said it is in “advanced stages of preparing” the offer for the television and entertainment assets Fox agreed to sell to Disney in a $52.4 billion stock deal announced in December.
Comcast, which owns the NBCUniversal media-entertainment group and is the largest US cable operator, said it was prepared to pay more than Disney for the operations, which don’t include Murdoch’s Fox News Channel, Fox Broadcasting and major sports channels.
“Any offer for Fox would be all-cash and at a premium to the value of the current all-share offer from Disney,” the Comcast statement said.
“The structure and terms of any offer by Comcast, including with respect to both the spin-off of ‘New Fox’ and the regulatory risk provisions and the related termination fee, would be at least as favorable to Fox shareholders as the Disney offer.”
Either deal would dramatically reshape the media-entertainment landscape and scale back the Fox empire created by the 87-year-old Murdoch.
Murdoch, who with his family controls 21st Century Fox, agreed to the tie-up in December that would give Disney the famed Fox studios in Hollywood along with Fox’s international TV operations and US cable entertainment and regional sports channels.
Included in the sale is Fox’s 39 percent stake in the British pay TV operator Sky. Murdoch has sought full control of Sky but has faced opposition from regulators in Britain.
Separately, Comcast last month made an offer of $30.7 billion in cash for Sky, in a move welcomed by the British firm.
Some reports said Murdoch had previously rejected an offer from Comcast. But the controlling family and shareholders would face pressure if the new offer is better than the one from Disney.
Fox had no immediate comment on the Comcast statement. But in its most recent earnings call, co-executive chairman Lachlan Murdoch said that “we are committed to our agreement with Disney” and that board members “are aware of their fiduciary duties on behalf of all shareholders.”
Analyst Richard Greenfield at BTIG Research predicted last month that Comcast would offer “a 25 percent premium to Disney’s bid” in an effort to win the deal.
“While a Comcast acquisition of Fox is surely challenging financially, Comcast has never shied away from a challenge,” the analyst wrote.
Either deal could face intense scrutiny from antitrust regulators because of the implications for the television and cinema sectors.
A tie-up with Disney would create giant a with up to 40 percent of US box office revenues, according to some estimates.
Comcast’s Universal studios is smaller than Disney’s but could vault to the top of the market by adding 20th Century Fox.
Either Comcast or Disney would gain global stature in the TV sector with Sky, the pan-European broadcaster with operations in Britain, Ireland, Germany, Austria and Spain. Comcast operates the NBC broadcast network while Disney owns ABC, and both have multiple cable channels.
The move comes with Murdoch gradually withdrawing from the empire he built, giving more authority to his sons Lachlan and James.
The group announced last week that Lachlan Murdoch would assume the role of chairman and chief executive at the “new” Fox, which would be tightly focused around the Fox News Channel and sports cable channels.
The consolidation in the sector comes with traditional operators facing pressure from online and tech platforms such as Netflix and Amazon, which are shaking up the model of pay TV deliver as well as the studio system for content production.
Another pending deal that would join telecom and broadband giant AT&T with media-entertainment group Time Warner is being challenged by the US Justice Department in an antitrust suit. A judge is expected to rule in that case next month.


BMW picks insider Zipse as CEO to catch up with rivals

Oliver Zipse
Updated 19 July 2019
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BMW picks insider Zipse as CEO to catch up with rivals

  • German giant has lost ground to Mercedes-Benz and Tesla as tech steps up

FRANKFURT: BMW has named Oliver Zipse as its new CEO, continuing the German carmaker’s tradition of promoting production chiefs to the top job even as the auto industry expands into new areas such as technology and services.
Hailing Zipse’s “decisive” leadership style, BMW hopes the 55-year-old can help it win back its edge in electric cars and the premium market  from rival Mercedes-Benz.
But some analysts questioned whether Zipse was the right choice with new fields such as software and services like car-sharing becoming increasingly important.
“What is intriguing is the cultural bias to appoint the head of production. It works sometimes but ... being good at building cars is not a defining edge the way it was 20 years ago,” said Jefferies analyst Philippe Houchois.
Current CEO Harald Krueger, and former chiefs Norbert Reithofer, Bernd Pischetsrieder and Joachim Milberg were all former production heads.
Zipse joined BMW as a trainee in 1991 and served as head of brand and product strategies and boss of BMW’s Oxford plant in England before joining the board.
He will become chief executive on Aug. 16, taking over from Krueger who said he would not be available for a second term.
“With Oliver Zipse, a decisive strategic and analytical leader will assume the Chair of the Board of Management of BMW. He will provide fresh momentum in shaping  the future,” said Reithofer.
Zipse helped expand BMW’s efficient production network in Hungary, China and the US, in a move that delivered industry-leading profit margins.
Under Krueger, BMW was overtaken in 2016 by Mercedes-Benz as the best-selling luxury car brand.
It also had an early lead over US  rival Tesla in electric cars, but scaled back ambitions after its i3 model failed to sell large numbers.
Reithofer initially championed Krueger’s low-key consensus-seeking leadership, but pressured him to roll out electric vehicles more aggressively, forcing Krueger to skip the Paris Motor Show in 2016 to reevaluate BMW’s electric strategy.
Krueger’s reluctance to push low-margin electric vehicles led to an exodus of talented electric vehicle experts, including Christian Senger, now Volkswagen’s (VW) board member responsible for software, and Audi’s Markus Duesmann, who is seen as a future CEO of the company.
Both were poached by VW CEO Herbert Diess, a former BMW board member responsible for research who was himself passed over for BMW’s top job in 2015.
VW has since pushed a radical 80 billion euro ($90 billion) electric car mass production strategy, and a sweeping alliance with Ford.

Other skills
“A CEO needs to have an idea for how mobility will evolve in the future. This goes far beyond optimising an existing business,” said Carsten Breitfeld, chief executive of China-based ICONIQ motors, and former BMW engineer. “He needs to build teams, attract talent, and promote a culture oriented along consumer electronics and internet dynamics.”
German manufacturers have dominated the high-performance market for decades, but analysts warn shifts towards sophisticated technology and software is opening the door to new challengers.
“Tesla has a lead of three to four years in areas like software and electronics. There is a risk that the Germans can’t catch up,” UBS analyst Patrick Hummel said.
Germany’s Auto Motor und Sport car magazine, normally quick to champion German manufacturers, this week ran a cover questioning BMW’s future.
“Production expertise is important, but if you want to avoid ending up being a hardware provider for Google or Apple, you need to have the ability to move up the food chain into data and software,” a former BMW board member said.