Why Isn't Walt Disney Paying Cash for the 21st Century Fox Deal?

There are many ways to skin a cat, and even more options when you're financing a $52.4 billion buyout. In the case of Walt Disney (NYSE: DIS) acquiring most of 21st Century Fox (NASDAQ: FOX) (NASDAQ: FOXA), it's a pure stock-swap transaction that prints out 515 million new Disney shares for the benefit of Fox shareholders. What does this mean, and why will Disney dilute the holdings of existing stock owners by a staggering 34%? Let's figure it out.

Image source: Walt Disney.

Disney's current share count stands at 1.51 billion stubs. The Fox transaction will require 515 million new shares, giving the Fox cohort 25% control over the merged companies. At that point, a couple of things will happen:

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Source: Fool.com