Australia’s Nine Entertainment & Fairfax Media to Merge

Nine Entertainment and Fairfax Media have agreed to a merger, creating “Australia’s largest integrated media player,” in a deal valued at around A$4 billion ($3 billion).

The proposed transaction will, subject to required approvals, see Nine acquiring all Fairfax shares. Nine shareholders will own 51.1 percent of the combined entity, with Fairfax shareholders owning the remaining 48.9 percent.

The combined business will be led by Nine’s current CEO, Hugh Marks. Three current Fairfax directors will be invited to join the board of the combined company, which will be chaired by Nine Chairman Peter Costello and include two further current Nine directors.

The combined business will span Nine’s free-to-air network and a portfolio of digital businesses, including Domain, Stan and 9Now, as well as Fairfax’s mastheads and radio interests through Macquarie Media.

Costello commented: “Both Nine and Fairfax have played an important role in shaping the Australian media landscape over many years. 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.”

Fairfax Chairman Nick Falloon said: “The Fairfax board has carefully considered the proposed transaction and believes it represents compelling value for Fairfax shareholders. The structure of the proposed transaction provides an exciting opportunity for our shareholders to maintain their exposure to Fairfax’s growing businesses whilst also participating in the combination benefits with Nine.”

Marks commented: “Nine’s strong operating momentum has allowed us to invest in the future of our business through each of 9Now, Digital Publishing and of course, Stan. This merger with Fairfax will add another dimension, creating a unique, all-platform, media business that will reach more than half of Australia each day through television, online, print and radio.

Fairfax CEO Greg Hywood said: “The proposed transaction for Fairfax reflects the success of Fairfax’s transformation strategy which has created value for shareholders through targeted investment in high-growth businesses, such as Domain and Stan, and prudent management of our media assets. The combination with Nine provides an exciting opportunity to continue to drive incremental value well into the future.

“We are confident that the strength of the combined management team and staff will ensure the continuation of our quality journalism.”