Twenty-First Century Fox Inc (NASDAQ:FOXA) and Walt Disney Co. (NYSE:DIS) have agreed to sell their shares in Sky PLC (LON:SKY) to Comcast Corp. (NASDAQ:CMCA).
Fox, which owns 39% in Sky, had wanted to buy the rest of the shares in the UK broadcast that it does not already own but was outbid by Comcast in an auction on Saturday.
Comcast offered £17.28 per share for a 38% stake, which was £1.61 ahead of Fox's bid of £15.67, valuing Sky at about £27.9bn.
Disney is to buy Fox’s entertainment assets, including its stake in Sky, but has decided to sell this holding rather than remain a minority shareholder, paving the way for Comcast to take a controlling stake in the firm.
Fox said on Wednesday that it would tender the shares in the Comcast offer.
"In light of the premium Comcast has agreed to pay for Sky, we and Disney have decided to sell 21CF's existing 39% holding in Sky to Comcast. We congratulate Comcast on their pending acquisition,” Fox said.
Disney plans to use the proceeds of the share sale, which will be about £11.6bn, to support its acquisition of the Fox assets, to strengthen its balance sheet and invest in content creation.
The acquisition of Fox’s assets is part of Disney’s plan to launch its own video streaming service to take on the likes of Netflix and Amazon.
As part of the deal, Disney will take over US streaming service Hulu from Fox.