Walt Disney says it has agreed to buy the Murdoch family's 21st Century Fox's entertainment assets for $52.4bn.
The deal will include the iconic 20th Century Fox film studio as well as Fox's 39% stake in satellite broadcaster Sky.
Fox News and Sports will form part of a new company.
Disney Chairman and CEO, Bob Iger, explained the thinking behind the deal:
"We're making it because this gives us the ability to marry the great content of Fox with the great content of Disney. It gives us a much larger international footprint and it enables us to use cutting edge technology to reach consumers in far more compelling ways."
The deal will also add to Disney's huge back catalogue, with high-grossing films such as the original Star Wars, helping the company compete with a fast-changing entertainment landscape.
"We're not really looking to necessarily reach the scale of Netflix quickly", said Iger. "But we certainly aim to be, you know, an able competitor to theirs. More importantly we believe that this is the way of the future - to be able to reach consumers directly."
The deal ends more than half a century of media expansion by Fox owner Rupert Murdoch, who is 86 years old. He turned a single Australian newspaper he inherited from his father at the age of 21 into one of the world's largest news and film empires.
It is not clear how the deal will be received by US antitrust regulators.
The US Department of Justice recently sued to block AT&T's $85.4bn deal to buy Time Warner, on the basis that it will raise prices for consumers and competitors.
Fox's proposed deal to buy the remainder of Sky is being already investigated by the UK Competition and Markets Authority (CMA), which is due to publish provisional findings in January.