Mexico. The Federal Institute of Telecommunications, IFT, approved granting The Walt Disney Company (Disney) and Twenty-First Century Fox, Inc. (21CF) a 2-month suspension of the disincorporation period to sell the Fox Sports business in Mexico, which would restart on September 29, 2020 and conclude on October 5 of the same year.
The order to disincorporate Fox Sports in Mexico is one of the conditions imposed on March 11, 2019 by the IFT Plenary, to authorize Disney to acquire assets of 21CF. In this sense, the period granted for this process expired on August 3, 2020. However, taking into consideration the situation generated as a result of the Covid-19 Coronavirus pandemic, the Parties requested the IFT to suspend the disincorporation period.
In response, the IFT Plenary determined to grant a suspension that includes from July 28 to September 28, 2020, so that the disincorporation period would restart on September 29, 2020 and would end on October 5 of the same year.
Based on the information provided by the Parties and the Independent Auditor, the IFT determined that the suspension is conducive since, at this time, there is a notorious impossibility for Disney and 21CF to continue in full with the disincorporation process and achieve the sale of Fox Sports in Mexico as of August 3, 2020.
The suspension granted by the Plenary does not exempt the Parties from compliance with the other conditions established in the resolution authorizing the concentration between Disney and 21CF, including the obligations relating to maintaining and selling Fox Sports in Mexico as a viable, competitive, going concern and independent business of Disney and 21CF, in the market for the provision and licensing of programming channels and programmes for pay-TV providers, in the sports category.
In this regard, the Disincorporation Agent, the Independent Auditor and the Independent Administrator shall remain in the exercise of their powers.
The Parties were also reiterated that, in the event that the period of disincorporation expires without the Fox Sports business in Mexico having been disposed of to a different economic agent, Disney and 21CF shall proceed to affect the ownership and all assets of that business to an irrevocable trust that has as its object, first of all, its sale as a viable, competitive and ongoing business.
The Agreement approved by the Plenary provides that, in the event that the reason for which the suspension was authorized persists after the period of 2 months of suspension, the Parties may request the IFT to extend it.
