Walt Disney Co. and 21st Century Fox Inc. agreed to breakup charges if the proposed merger agreement between the companies is terminated.
Disney will pay 21st Century Fox a $2.5 billion breakup fee if the company's $52.4 billion deal to buy a wide range of Fox assets fails to get regulatory approval, Disney said in an SEC filing.
The merger agreement between the companies also provides for a termination fee of roughly $1.53 billion if either side backs out of the transaction for certain other reasons.
The transaction includes 21st Century Fox's movie and TV studios, the FX Networks and National Geographic Partners and its 22 regional sports networks. The agreement, announced Dec. 14, also gives Disney Fox's stake and a controlling interest in streaming service Hulu LLC.
The transaction expands Disney's presence abroad, via Fox Networks International, with more than 350 channels in 170 countries; Fox's fast-growing Star India; and its 39% ownership of satellite giant Sky plc across Europe.
Immediately prior to the acquisition, 21st Century Fox will separate the Fox Broadcasting network and stations, FOX News Channel, FOX Business Network, FOX Sports 1, FOX Sports 2, and Big Ten Network into a newly listed company that will be spun off to its shareholders.