Walt Disney has agreed to buy the bulk of 21st Century Fox's business for $52.4bn (£39bn), in a deal both companies said position them to compete in the rapidly changing media industry.
The purchase includes Fox's film and television studios, as well as its 39% stake in satellite broadcaster Sky.
Fox will form a news-focused company with its remaining assets.
The move is a sharp shift for 86-year-old Fox owner Rupert Murdoch after more than half a century of media expansion.
Mr Murdoch 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.
He said the break-up makes sense amid new threats from online advertising and competitors who are streaming entertainment into homes via the internet.
Fox shareholders, who include the Murdochs, will get a 25% stake in the larger Disney.
Disney will scoop up Fox's movie and television studios, regional sports network and international holdings, among other investments.
The move adds to Disney's back catalogue high-grossing films such as the original Star Wars movies, the Marvel superhero pictures, Avatar and Deadpool, as well as TV hits such as Modern Family and The Simpsons.
It expands Disney's offerings with the FX and National Geographic cable channels, and Fox's regional sports network in the US.
The purchase also extends Disney's global reach, adding media company Star India and Fox's interests in Sky plc and Tata Sky to its portfolio.
Disney will also get majority control of the video streaming service Hulu, which is also partially owned by Comcast and Time Warner.
Disney will assume $13.7bn in Fox debt as part of the stock deal, taking the total value of the transaction to more than $66bn.
The firm believes this deal will give it the scale to compete, and expects to wring "at least" $2bn in cost-savings out of the new company to boot.
Fox is creating a smaller firm focused on news and major live sports events in the US.
It will hold onto its flagship Fox News Channel, Fox Business Network, Fox Broadcasting Company, Fox Sports, Fox Television Stations Group, and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network, reports BBC.