Disney and FuboTV on Monday announced a planned merging of Hulu Live + TV and Fubo. Disney will have a 70% ownership stake in Fubo when the deal closes.

Disney announced a deal with pay-TV provider Fubo to combine Hulu + Live TV with Fubo's operations in a joint venture, ending Fubo's Venu lawsuit.

Disney's Hulu + Live TV and sports streaming service Fubo are combining in a deal that will also see the settlement of a lawsuit against the creation of Venu Sports. Fubo and Hulu + Live TV both allow customers to stream live broadcast and cable networks on their connected TVs,

In a surprising deal announced on Monday, Disney is set to combine its Hulu Live TV business with Fubo, the live TV streaming service known for its extensive sports coverage. Under the terms of the deal, Disney will own about 70% of Fubo, which will continue to be available to viewers as a separate offering.

The launch of sports streamer Venu, "and potentially new packages from Fubo, appears to be an important strategic lever to cast a wider net and catch all potential subscribers," says one Disney analyst.

Disney will merge its Hulu + Live TV virtual MVPD with competitor Fubo, expanding its sports-focused distribution while settling a suit over skinny bundle Venu.

According to a press release, Fubo and Hulu with Live TV will continue to be offered separately, but new subscription packages will be available after the deal closes. Customers will continue to use the Fubo app to watch Fubo programming, and Hulu's live TV subscribers will retain access to the Disney bundle and stream content via the Hulu app.

Disney and Fubo have reached an agreement to merge Hulu + Live TV with FuboTV, the companies announced via a press release. This will create a new entity that Disney owns 70 percent of, with Fubo taking up the remaining 30 percent.

These benefits are all hypothetical for now, but any attempt by Fubo and Disney to take on YouTube TV has to mean good things for subscribers: the two streaming services will naturally need to get more competitive to win over YouTube TV subscribers, be it by bolstering the channel list, reducing the price or improving the user experience.

The deal will create a streaming multichannel video service that is second only to YouTube in scale, while potentially allowing the Venu service to move forward.