He assured staff that the move will be better for the company’s future and is “not about cost reductions”.
See Hugh Marks’s email to staff in full below.
Today marks a truly momentous development for Nine’s future.
This morning we announced to the stock market the news that Nine and Fairfax have agreed terms to merge our businesses into one corporate entity, NEC.
The ground-breaking merger – harnessing the strength, assets, quality and reach of two of the country’s most famous industry brands – is another highly significant step in the evolution of Nine’s business into one of the most powerful media organisations in the country.
The scope of this deal is genuinely quite breathtaking.
In addition to our existing television and digital businesses, the new NEC will also become the proprietor of the iconic Fairfax mastheads as well as the new majority owner of Domain (60%) and the Macquarie Radio Network (54.5%). And through the transaction Nine will also move to 100% ownership of Stan.
This deal is all about our strategy for the future. A strategy that on completion of the merger enables the new Nine to:
• Significantly extend the scale of our offering to advertisers
• Substantially increase Nine’s exposure to high growth digital revenues through 9Now, the combined digital publishing businesses of Nine and Fairfax, and of course ownership of a majority position in Domain.
• Invest further in our core news and current affairs DNA, enhancing even further our ability to provide quality, independent, reliable and accurate News and Current Affairs content across all available platforms; and
• Really focus on the next steps that will be available to us for the future growth of STAN;
All as part of a company with a balance sheet that enables us to continue to prudently invest in our content creation and distribution for the future of media and entertainment.
In the new combined business NEC’s existing shareholders will have a 51% shareholding and Fairfax’s existing shareholders will receive new shares that will equate to 49% of the shares in NEC.
Peter Costello will remain Chairman of NEC – the new business – and I will remain CEO.
The new NEC Board will be comprised of members of both the existing NEC and Fairfax Boards.
Such a merger of two major media groups will of course result in some duplication of functions and you will read about synergies that will be pursued by the business as part of this transaction. But let me stress this merger is not about cost reductions. This merger is all about creating a business with the diversity and scale of revenues and earnings to be able to continue to do what we are all about. Create great content. Distribute it broadly. And engage our audiences and advertisers. Ultimately our people will all have new opportunities across more platforms, brands and identity to connect with audiences.
We will of course be outlining more details of the merged business over the ensuing months, but for now we embark on this new expanded phase of our company’s journey, with a scale of resources and platforms to continue to build on our shared heritage and iconic brands.
Make no mistake, these are exciting times for Nine. I look forward to joining with you all in making this merger an outstanding success. It’s a big deal. And it promises to substantially strengthen and reinforce what’s so great about our business into the future.