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Australian media giants Fairfax and Nine to merge
[SYDNEY] Publisher Fairfax Media and Nine Entertainment announced plans to merge on Thursday, creating an integrated Australian media giant across television, online video streaming, print, and digital.
Under the deal, Nine will effectively be the dominant partner, with its shareholders owning 51.1 per cent of the combined entity and Fairfax shareholders owning the rest.
The new company will include Nine's free-to-air television network, Fairfax's radio interests and mastheads - including The Sydney Morning Herald and The Age in Melbourne - and a suite of digital assets.
It is the first deal under a controversial new media ownership law passed in Australia in September last year which removed restrictions preventing media companies from owning newspapers, radio and television stations in the same city.
The law had been tipped to unleash a series of mergers involving television broadcasters and the country's two main newspaper groups, Fairfax and Rupert Murdoch's News Corp.
Like its international peers, Fairfax has had its profits squeezed as advertising and circulation slump in the digital age, and its board unanimously recommended the Nine proposal.
"The Fairfax board has carefully considered the proposed transaction and believes it represents compelling value for Fairfax shareholders," Fairfax chairman Nick Falloon said.
A merger "unlocks the potential for significant value creation by combining the content, brands, audience reach and data across the respective businesses", both companies said in a statement.
"Both Nine and Fairfax have played an important role in shaping the Australian media landscape over many years," said Nine chairman Peter Costello.
"The combination of our businesses and our people best positions us to deliver new opportunities and innovations for our shareholders, staff and all Australians in the years ahead."
The deal is expected to be completed before the end of the year with current Nine chief Hugh Marks heading up the company with three Fairfax directors invited to join the board.