China’s 'Green Light' Makes Disney (DIS) and FOX (FOXA) Soar

The escalating trade war between China and the U.S. spurred concerns for the impending deal between Walt Disney and 21st Century Fox.

But with Chinese regulators finally approving Walt Disney's $71.3 billion acquisition of nearly all 21st Century Fox’s film and television assets, the most important hurdle for the blockbuster deal has been cleared.

With the news hitting the market, shares of Disney rose nearly 1% while shares of Fox rose 3%.

Although the deal still needs regulatory approval from several other nations, this unconditional Chinese approval is the biggest stepping stone towards successful execution of the deal amidst ongoing geopolitical tensions.

With the deal expected to be complete within the first half of 2019, it would transform the entertainment landscape as it gives Disney access to key film brands such as Avatar and X-Men, as well as some of the big TV hits such as “Atlanta,” “It’s Always Sunny in Philadelphia,” and “American Horror Story.” Furthermore, it would give Disney unlimited access to the Chinese market, which has become a key source of box office revenue for the company by emerging as the second biggest market for its films.

U.S. antitrust regulators had already approved the deal in June, while EU regulators’ approved it earlier this month, but on both occasions it brought divestment conditions.