Home Deals Nine, Fairfax merge to create Australia's biggest media player
Nine, Fairfax merge to create Australia's biggest media player Featured

Australian media companies Nine Entertainment and Fairfax Media have agreed to a merger, to be implemented by Nine acquiring all Fairfax shares.

An announcement made to the Australian Stock Exchange on Thursday morning said Nine shareholders would own 51.1% of the combined entity and Fairfax shareholders the remaining 48.9%.

The combined company will be led by current Nine chief executive Hugh Marks. The merged entity will be called Nine and will have a value of $4.2 billion.

Three current Fairfax directors will join the board of the combined business that will be chaired by Peter Costello, the Nine chairman, and include two more current Nine directors.

The ASX announcement said: "The combined business will include Nine’s free-to-air television network, a portfolio of high growth digital businesses, including Domain, Stan and 9Now, as well as Fairfax’s mastheads and radio interests through Macquarie Media.

“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," Fairfax chief executive Greg Hywood said in a statement.

"The combination with Nine provides an exciting opportunity to continue to drive incremental value well into the future.”

Costello said in a statement: “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.”

The Australian Greens said media diversity in the country had taken a hit with the announcement of the Nine Fairfax merger.

“This merger paints a sad reality of the media landscape in Australia. It is a dark day for public interest journalism,” Greens media spokesperson Senator Sarah Hanson-Young said.

“In this era of little faith in politics, and the rise in fake news, we need greater diversity and stronger public interest journalism. It is greatly disappointing to see our media diversity continue to be watered down.

“Nine now needs to be upfront with staff on whether their jobs will be safe under the new corporate banner.

“Between this merger and the ongoing assault on the ABC and SBS, Australians will be very concerned about the quality of their news on television, online and in print.”

Labor Shadow Communications Minister Michelle Rowland said the proposed merger meant the media sector was about to get even more concentrated.

"Last year (Prime Minister) Malcolm Turnbull repealed the two out of three cross-media control rule which prevented any one media voice from becoming too dominant," she said. "Turnbull junked it with the help of Pauline Hanson and now there’ll be further media consolidation and further job losses in the media, potentially even in regional areas.

"Labor opposed the repeal of the two out of three rule in the Parliament because democracy suffers if you have too few media voices; workers suffer when mergers inevitably lead to job losses; and citizens, consumers and communities get less diversity, less coverage and less choice."

Rowland said that Turnbull's removal of the media diversity rule had come at a time when he was attacking the ABC and the SBS. "The Liberals cut the ABC and SBS after promising no cuts and have launched an ideological attack on public broadcasting with three bills before Parliament to meddle with the ABC and SBS Acts, a competitive neutrality inquiry and a further efficiency review - to say nothing of the barrage of complaints by the minister (for communications Mitch Fifield).

"What this proposed merger means is that public broadcasting has never been more important in Australia. We need quality news and journalism from a range of sources, which is why protecting the ABC and SBS from Liberal cuts is critical, and why Labor will always fight for public broadcasting."

The merger is expected to be concluded before the end of the year.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the sitecame into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

 

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