Mexico: IFT clears Disney-Fox merger; sets conditions

Mexico´s Federal Institute of Telecommunications (IFT) approved on Tuesday, March 12, the merger operation between entertainment giants The Walt Disney Co. and 21st Century Fox, subject to the deal’s compliance with conditions intended to mitigate or eliminate risks to competition and to benefit consumers. The decision comes amidst an ongoing tensión between Mexico’s antitrust watchdog, the Federal Economic Competition Commission (COFECE), which had approved other aspects related to the merger, and legislators belonging to the ruling MORENA party, with the backing of President López Obrador, who have criticized the planned merger and the decisions made by the regulator.

The IFT identified risks to competition in two markets, in the categories of sports television programs and “factual” programs, which includes documentaries, cultural programs and so-called ‘reality’ shows.

“The Institute imposed behavioral conditions that counteract those risks in the market of ‘factual’ channels and structural conditions in the sports channels market, through the sale of the Fox Sports business,” the authority stated.

In addition, the IFT ordered the divestment of all businesses related to the provision and licensing of the Fox Sports channels (Fox Sports), which includes all the assets necessary to maintain it as a viable business independent of the mentioned parties, which includes transmission rights, current contracts, real estate, equipment, among others. The sale must be completed within a period of six months.

The effects of this concentration were analyzed by competition authorities in various countries where the companies operate, including Mexico, the USA, Canada, Europe, Brazil and Chile. The corresponding authorities in these countries analyzed possible effects and risks in their markets and have all authorized the concentration, subject to various conditions, with a great deal of coordination and international cooperation.