Brazil’s Administrative Council for Economic Defence (Cade), the competition regulator, has ruled that the planned acquisition of 21st Century Fox by the Walt Disney Company will be subjected to a review.
In February, Disney agreed to sell its Fox Sports channels in Brazil and Mexico as part of the process to complete the $71.3bn (€64.7bn) takeover of Fox’s entertainment assets.
Cade has now announced that the deal will be reassessed as the required sale of Fox Sports has not yet occurred.
Cade said in a statement: “The sale of the Fox Sports channels was one of the measures negotiated between Cade and the companies in a Concentration Control Agreement (ACC) to dispel competitive concerns arising from the operation.
“The goal was to allow the market structure to remain under the same competitive pressure as prior to the merger, with the continuation of three consumer sports channel operations in Brazil: (Globosat’s) SporTV, ESPN and another new company with the assets from Fox Sports.”
Cade continued: “Accordingly, the Cade Court set a deadline for the divestiture of the channel. However, although the parties made an effort to comply with the determination, the sale was not materialised. Therefore, as provided in clause 14.3 of the ACC, Cade decided to review the transaction.”
The reassessment will consider “other options”, although Cade did not provide specific details.
The announcement comes after Mexico’s antitrust regulator, the Federal Telecommunications Institute (IFT), agreed earlier this month to hand Disney and Fox Sports a six-month extension to sell sports assets in the country.
The IFT ordered an independent auditor to take sole responsibility for the sale or divestment of the sports business after Disney indicated that potential buyers for the sporting assets had requested more time to review the assets before making any formal offers.
Fox Sports’ rights portfolio in Brazil includes football’s Copa Libertadores.