Rupert Murdoch May Consider Merger Between Fox and News Corp

Rupert Murdoch has dissolved a committee evaluating a possible merger of broadcaster Fox Corp and its publishing company News Corp, ruling that a merger was not in the best interests of shareholders.

News Corp CEO Robert Thomson wrote to employees on Wednesday to update them on Murdoch and his son Lachlan Murdoch’s decision to halt an independent committee’s evaluation of a potential merger.

“News Corp’s board of directors, upon receipt of a letter from Rupert Murdoch, has dissolved the committee of independent directors,” Thomson said. “The letter indicates that Rupert and Lachlan Murdoch have determined that a combination of the two companies is not optimal for News Corp and FOX shareholders at this time.”

Fox Corp released a similar statement.

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Murdoch’s departure comes three months after News Corp announced it had appointed a special board committee of independent directors to review a deal that would link Fox Corporation, which operates cable television network and betting company FoxBet, with the traditional publisher – and real estate assets incl The Wall Street Journal, The Times and The Australian.

News Corp and Fox Corp have been separate companies since 2013, and both have changed dramatically since splitting up nearly a decade ago. Fox sold most of its entertainment assets to Walt Disney Co for $71 billion (US$114.5 billion) and focuses primarily on broadcast and cable television, led by Fox News Channel. News Corp has diversified into new areas such as online real estate services.

The merger of the two companies would have given the Murdochs a broader portfolio of investment opportunities. It would also have cemented the power of Rupert’s son Lachlan, News Corp’s co-chairman. He is also Executive Chairman and Chief Executive Officer of Fox.

Neither company detailed Murdoch’s decision to withdraw the plans. The independent panel had not yet made a decision on whether the merger was viable.