Fox will spin off the assets it plans to keep, with Disney acquiring the studio, cable channels such as FX and National Geographic, and global assets in a deal valued at about $60 billion including debt, the people said, asking not to be identified discussing private information.
An acquisition of Fox's assets, including its film studio, cable channels and stakes in Hulu and Sky, would bolster Disney's content offering before rolling out the new service in 2019.
Assuming Disney acquires the Fox assets in a stock-based deal, Fox shareholders would end up with about 25 percent of Disney, according to Rosenblatt Securities Inc.
This deal comes a little more than two years after Murdoch handed control of 21st Century Fox over to his sons James and Lachlan with James becoming the company's CEO and Lachlan its executive chairman.
Disney would not be able to acquire the broadcast channel or Fox Sports even if they were up for sale since the company already owns a broadcast channel (ABC) and sports network (ESPN). The 20th Century Fox lot in Century City will also remain part of the new spin-off company being created.
The companies were also said to be discussing what measures need to be taken to be approved by United States regulators.
The Murdoch family will own 5pc of Disney following the deal, and will also still own News Corp, which includes titles The Times, The Sunday Times and The Sun.
The deal will be scrutinised by the United States and UK regulatory authorities. Furthermore, I'm convinced that this combination, under Bob Iger's leadership, will be one of the greatest companies in the world. "We never got the level of engagement needed to make a definitive offer".