Rupert Murdoch considers the merger of two halves of his business empire

Rupert Murdoch finalized his divorce from his fourth wife, Jerry Hall, in August. But the two halves of his business empire are exploring the union.

News Corp, which owns publishing titles including The Wall Street Journal, The New York Post, the London-based Sun tabloid and Fox Corp, which includes Fox News and Fox Sports, said Friday night that it is exploring a possible merger at the behest of Murdoch and his family’s trust.

The two companies said that they each formed a special committee to review the proposal.

Murdoch Family Trust owns about 40 percent of the voting stakes in both News Corp and Fox Corp — and any combination would be a corporate reunion.

The two entities shared a management structure until they were split in 2013 in response to a major scandal that rocked some of the Murdoch papers in London. Revelations that their journalists were hacking into the voice messages of celebrities and other tabloid targets led to overlapping criminal and civil investigations and government inquiries that found systemic corruption in the British tabloid industry – a potential threat to the Murdoch empire.

At the time, Murdoch described the split as a move that would “enable each company and its division to realize their full potential — and unlock greater long-term shareholder value.”

But it was accompanied by a degree of family drama for Murdoch. James, Rupert Murdoch’s youngest son, has left his position as chief executive of their European and Asian businesses – including the London tabloids. He eventually became the CEO of 21st Century Fox entertainment. But he ended up falling out over business strategy with his older brother, Lachlan, who was promoted to the company’s co-CEO.

In the end, their father decided to remove the company he had spent his life building from their mutual conflict.

In 2019, the Murdochs closed a $71.3 billion sale of most of 21st Century Fox – which also included the FX cable network, Fox Searchlight brand and National Geographic properties – to Disney.

While James Murdoch left his executive roles with the sale, Lachlan chose to stay and manage the parts of the company that remained under Murdoch’s control, including Fox News, Fox Television, and Fox Sports. In the summer of 2020, James left the family business entirely, acknowledging “disagreements over certain editorial content published by the company’s news outlets and some other strategic decisions” – a statement seen as his comment on Fox News’ increasingly conservative bent.

Lachlan Murdoch told Fox investors in 2019 that the family had no plans to merge the two companies, but Rupert Murdoch has raised the possibility of the two reuniting in recent weeks, according to people who spoke to him directly and asked not to be identified to discuss private conversations.

The elder Murdoch told these people that he believed the merger would give the combined companies greater ability to negotiate and do business with giants like Netflix, Amazon and Disney.

In its announcement, News Corp said the special committee “has not made any decision with respect to any such potential combination at this time, and there can be no certainty that the Company will enter into such a transaction.” Both companies said they do not plan to comment further.

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