As news broke this week that 21st Century Fox Inc. (FOXA) is closing in on a deal to sell its film studio and television production assets to Walt Disney Co. (DIS), one team of analysts sees the $60 billion sale as a win-win for both media giants.

In a research note Wednesday, analysts at Macquarie wrote that a horizontal merger wouldn’t encounter much regulatory resistance and would be positive for both companies. (See also: Fox Favors Selling $60 Billion in Assets to Disney.)

Going International

As for Fox, the $63 billion global company controlled by the Murdoch family, the investment firm indicated the deal would be in line with its larger focus on live content. After the deal’s close, Fox would be left with a U.S.-centric TV network business consisting of Fox News, Fox Sports, the Fox broadcast network and a number its local stations. Macquarie noted that the firm could use the new $60 billion in pre-tax cash to do “practically anything with.”  

With the new assets, Disney should gain significant scale and distribution as it heads off against a growing number of new players including Netflix Inc. (NFLX), Amazon.com Inc. (AMZN) and Apple Inc. (AAPL). Further, Macquarie wrote that owning a second major studio could help Disney build out its direct-to-consumer business slated to launch in 2019. Increased ownership of streaming platform Hulu should work to offset cable subscription declines and give the company “a much bigger international TV presence at a time when its brand equity is growing through its films and parks.”

Also this week, analysts at Piper Jaffray released a research note in which they were similarly bullish on the deal and its ability to lift Disney by diversifying its revenue streams and increasing its intellectual property and market share. (See also: What a Disney, Fox Merger Could Mean for Netflix.)

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