Walt Disney Co said on Friday it would sell its interests in 21 regional sports networks and Fox College Sports to Sinclair Broadcast Group Inc for $9.6 billion, a deal that clears the way for its purchase of Twenty-First Century Fox Inc`s film and television assets.

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The deal will help Sinclair, the largest U.S. broadcast station owner, add channels such as Fox Sports Detroit and Fox Sports Florida to its existing sports business that includes Marquee Sports Network and Ring of Honor Wrestling.

Shares of Sinclair, whose bid for Tribune Media Co collapsed last year following opposition from the Federal Communications Commission, were trading up 14.6 percent at $51.50 in after-hours trading.

Friday`s deal excludes the New York Yankees team`s regional sports network, Yes.

Sinclair plans to make the acquisition through a newly formed indirect subsidiary called Diamond Sports Group LLC.

The company said Byron Allen, CEO of Entertainment Studios, will serve as an equity and content partner in a newly formed indirect wholly-owned unit of Sinclair and an indirect parent of Diamond.

Disney, which closed the acquisition of Fox`s film and television assets in March, had agreed to sell the networks as part of an agreement with the U.S. Department of Justice.

"The news could bring some closure to Disney`s pending obligations regarding the consent decree, while the company continues to take steps to fortify ESPN amid a paradigm shift to direct-to-consumer offerings," CFRA analyst Tuna Amobi wrote after the Wall Street Journal https://www.wsj.com/articles/sinclair-to-acquire-sports-networks-from-di... first reported about the impending deal.

The assets are valued at $10.6 billion, including minority equity interests.

The regional sports networks portfolio delivered a combined $3.8 billion in revenue across 74 million subscribers in 2018, the companies said.

"The transaction is expected to be highly accretive to free cash flow and brings consolidated net leverage to 4.7x and 5.1x through the preferred financing," said Sinclair Chief Executive Officer Chris Ripley.

Diamond or Disney may end the deal if not completed by February 2020, according to a filing http://www.sec.gov/Archives/edgar/data/912752/000091275219000017/0000912....

Completion of the deal is subject to customary closing conditions, including the approval of the U.S. DoJ.

Guggenheim Securities LLC, Deutsche Bank Securities Inc, RBC Capital Markets, Pursuit Advisors and Moelis & Co are Sinclair`s financial advisers.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)