Nine Entertainment and Fairfax Media have announced plans to merge, creating Australia's largest media player.
Nine shareholders will own 51.1 per cent of the combined entity and Nine CEO Hugh Marks will lead the new company.
Fairfax shareholders will continue to own the remaining 48.9 per cent.
The directors of Fairfax will unanimously recommend Fairfax shareholders vote in favour in the absence of a superior proposal.
The offices of Fairfax Media in Sydney. Source: AAP
"The Fairfax Board has carefully considered the Proposed Transaction and believes it represents compelling value for Fairfax shareholders," Fairfax chairman Nick Falloon said in the statement.
"The directors of Fairfax will unanimously recommend that Fairfax shareholders vote in favour of the Scheme in the absence of a superior proposal."
Fairfax Media chief executive Greg Hywood announced the merger - includnig that the new company would be called Nine, dropping the Fairfax brand, in a statement to staff this morning.
“Over the last eight years, Fairfax Media has gone from being at the mercy of the non-stop global media revolution to being best of its breed. And that is why Nine wants to merge their business with ours,” he said.
Fairfax CEO Greg Hywood. Source: AAP
“Working through the detail will take a number of months but you can be assured there be plenty of Fairfax Media DNA in the merged company and the Board.
“It is business as usual as we move through the necessary details… at the end of this process, the business will be a media company of scale, depth of offering and digital capacity and opportunities like no other in our region.”
The two media bosses addressed a conference call this morning, with Mr Hywood telling reporters the companies were "pretty hopeful" the ACCC would allow the deal to go ahead.
"I think that this deal, this proposed deal, is well within the spirit of the Government's legislation last year," he said.
“If you look at the integration of these businesses, there's not a lot of areas of competitive overlap.”
If it also secures the blessing of shareholders, the deal is likely to take “some months” before it is finalised, Mr Hywood said.
According to a statement to the ASX, the two media companies have entered into a Scheme Implementation Agreement.
Three current Fairfax directors will be invited to join the board of the combined business, which will be chaired by Nine Chairman, Peter Costello and two current Nine directors.
"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," Mr Costello said.
But journalists' union the Media, Entertainment and Arts Alliance has called on the ACC to block the move.
"This takeover reduces media diversity. It threatens the editorial independence of great newsrooms at Nine, the Sydney Morning Herald, The Age, Canberra Times, Illawarra Mercury, Newcastle Herald, Macquarie Media and more - right around the country," MEAA president Marcus Strom said.
"It harms the ability of an independent media to scrutinise and investigate the powerful, threatens the functioning of a healthy democracy, undermines the quality journalism that our communities rely on for information."
Merger talks were floated earlier this year, however, a deal reportedly fell through.
Media reforms passed the Senate late last year, paving the way for cross-platform mergers.
- with wires
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