Brazil Antitrust Agency to Re-examine Disney-Fox Deal

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Disney CEO Bob Iger

Local regulator Cade said the sale of the Fox Sports pay TV channel, a condition for approving the pact, wasn't completed by the original deadline.

Brazil's antitrust agency Cade (Administrative Council for Economic Defense) ruled Wednesday that it will revise Disney's acquisition of Fox, which had been approved in February on the condition that the new company would sell the Fox Sports channel in the country.

The asset sale was meant to avoid market concentration and maintain the same competitive balance prior to the purchase, with three choices of sports channels for Brazilian viewers: Globosat's SporTV, ESPN and a new company with Fox Sports assets.

Cade has stated that the date set for the network sale in the antitrust operations deal (ACC) agreed between the companies and the agency wasn't met and the sale hasn't occurred, which has prompted the decision to review the operation.

The assets meant to be divested included all rights to air sports events owned by Fox Sports, all contracts with pay TV operators, key employees, real estate and transmission equipment. 

According to Cade director Alexandre Barreto, the reassessment is the best way to address the concerns around any aspects related to market concentration.

"The decision is equanimous and proportional, precisely because it offers the chance to manifest on other viable options," said Barreto.

Brazil had been one of the final regulatory hurdles for the mega-deal, which had to face similar asset sales in Mexico and Europe.