NZME has agreed to buy Fairfax NZ for $55m if their proposed merger wins regulatory approval - with Fairfax Media taking a 41 per cent share in the merged entity.
The deal would create New Zealand’s largest media company with an audience of 3.7 million.
Sydney-based Fairfax would have two directors on the NZME Board under a merger implementation agreement released yesterday to the stock exchanges of Australian and New Zealand.
The merger must be approved by the NZ Commerce Commission, which has promised guidance next month and a final decision on or before March 15. Consent is also required from the New Zealand Overseas Investment Office and a shareholder vote – seen as a formality – will be held in November at the latest.
“We are delighted to have progressed merger negotiations to this stage and to be in a position to shortly put this proposition to NZME shareholders," said NZME CEO Michael Boggs. NZME plans to use a syndicated bank facility to fund its obligations under the merger agreement.
Fairfax NZ managing director Simon Tong said the merger would combine leading and complementary brands in news, sport and entertainment across multiple channels. “Both businesses have a tradition of innovation and a combined business allows us to continue to invest in quality New Zealand journalism – ensuring a strong future for storytelling by Kiwis, about us, and for us,” he said.
Until all conditions of the merger are satisfied, NZME and Fairfax NZ will continue to operate as independent businesses.
Fairfax operates the New Zealand’s largest print media network, featuring nine daily and three weekly newspapers, 61 community publications, 10 magazine titles and six websites, including stuff.co.nz.
NZME owns eight daily and two weekly newspapers - including flagship The New Zealand Herald - as well as 24 community publications, six magazine titles, 10 radio stations and 38 print and radio-related websites, including nzherald.co.nz, as well as a number of individual sites including Grabone, Shop Green and Adhub.