Blockbuster Deal In The Greater Entertainment Industry

As initially reported a couple weeks ago, The Walt Disney Company (NYSE:DIS) has agreed to terms in buying film and TV business assets from 21st Century Fox (NASDAQ:FOXA) for $52.4 billion in an all-stock deal ($66.1 billion including debt). Fox shareholders will be granted a 25% stake in Disney, and Disney CEO Bob Iger will remain in charge through at least 2021.

This is a true blockbuster deal in the greater entertainment industry — the company that began feature-length animation films in 1937 with the release of “Snow White & the Seven Dwarfs” and controls the entire catalogue of Pixar, “Pirates of the Caribbean” and many, many others will now bring in the entire Star Wars and “Frozen” franchises. The deal is expected to be completed in 12-18 months, and it has already been stated that Disney will first complete its acquisition of European communications company Sky.

Should another suitor attempt to cut in on this mega-merger process, it will cost them a $1.25 billion breakup fee — enough to likely keep all challengers at bay. Currently, Disney carries the risk to the tune of $2.5 billion in fostering this deal, which is valued at $40 per share for FOXA shareholders.

This deal does not include other segments within the Fox company, such as Fox News, Fox Sports or Fox Business. Those remaining assets, currently valued at around $2.8 billion in EBITDA (according to CNBC’s David Faber, who originally broke the merger news), will likely create a separate entity, but no details are forthcoming this morning.

Big Morning for Econ Data

Initial Jobless Claims, during this seasonally strong period for domestic employment, fell to the bottom of the long-term range we’ve seen over the past several quarters — to 225K, a full 11,000 claims lower than the previous week. Continuing claims, which had been creeping up in recent weeks, also fell — to 1.886 million from 1.91 million the previous week.

Retail Sales for November came in much higher than expectations at 0.8% (estimates were for 0.3%). This is also much higher than the previous month’s +0.2%. Stripping out auto costs to get a better read on less-expensive retail items, November Retail Sales grabbed a 1-handle — 1.0%, versus a 0.7% estimate. This is more excellent news for retailers overall, and looks to speak well for this current holiday shopping season.

Finally, November Import and Export Prices also hit the tape ahead of the opening bell this morning, with Imports coming in at +0.7% and Exports +0.2%. This speaks well for the growing strength in the global economy, which has been reitertated by ECB President Mario Draghi this morning, who has upped his Eurozone economic growth estimate from 1.8% to 2.3%, with further upside surprises possible.