NZME and Fairfax New Zealand, the country’s two biggest media companies have signed a deal, outlining details for their proposed merger.
The Commerce Commission has stated that it will make its final decision about granting merger next year on March 15.
Michael Boggs, chief executive at NZME, says, “The merger will present opportunities for NZME to significantly enhance our integrated offerings to both our audience and our advertising clients.”
Under the terms announced, NZME buys 100 percent of Fairfax New Zealand in return for 41 percent of the enlarged company’s shares. Fairfax New Zealand’s Australian owners would receive $55m cash. NZME would increase its debt levels to $250m through a syndicated bank facility
To the year ended June, the companies had a combined revenue of $766.2m, with an operating profit of $135.2m. Simon Tong, managing director of Fairfax Media New Zealand, says, “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.”
The companies say the merged business could increase value for NZME shareholders, as it would have a combined audience size of about 3.7 million people, across print, digital and radio platforms.
NZME owns several North Island daily newspapers including the New Zealand Herald, radio stations and websites, including nzherald.co.nz and Grab One. Fairfax’s portfolio also includes newspapers The Press, The Dominion Post and Sunday Star Times and the web site stuff.co.nz. The businesses have a combined workforce of more than 3000 people. The proposed merger could threaten several hundred of these jobs.
The Commerce Commission has received a large number of submissions opposing the plan. Among other issues, it will look at the impact on the national print industry.
