APN News & Media and Fairfax Media have confirmed they're in talks about a potential merger of their New Zealand media assets later this year.
In a joint statement to the Australian Securities Exchange, the companies said their New Zealand businesses are largely complementary and together would offer news, sport and entertainment across print, digital and radio.
In a separate statement, APN said it plans to demerge its NZME unit - including flagship newspaper The New Zealand Herald - whether the merger deal goes ahead or not. APN announced an $180m capital raising for funds to demerge its NZ unit from the parent company and float it on the NZ stock exchange. The demerger would see eligible APN shareholders receive one new share in NZME for each existing APN share, while retaining their existing APN shareholding.
"The merger of NZME and Fairfax's NZ business provides an exciting opportunity for our shareholders, particularly our New Zealand shareholders, to participate in the creation of a leading media business for New Zealanders," said APN chief executive Ciaran Davis.
"The combination of these two businesses would provide the necessary capability to continue investing in high-quality local news, sport and entertainment at a time when advertiser commercial investment continues to fragment across international media platforms that do not invest in local content," said Davis. "If completed, the combined company will be a leading New Zealand media business, offering depth of news, sport and entertainment coverage across a diverse mix of channels including print, digital and radio."
Fairfax Media CEO Greg Hywood told the ASX: “This is an important opportunity for all of our shareholders to be part of the future in content and journalism in New Zealand. The merger would enhance the position the businesses are in to continue to deliver high quality, local content to audiences now and in the future.”
If APN and Fairfax do complete the merger, News Corp - which controls 14.9% of APN - will end up as the major shareholder in any merged company, giving itself trans-Tasman dominance, according to Crikey media analyst Glenn Dyer: "The upshot of all this is that by the end of the year the Murdoch clan could control more than 70% of all print in Australia."
Any deal would require approval from the Commerce Commission and other regulatory consents, as well as agreement of the two boards and the shareholders.