Companies want to create a A$440m (£217m) domestic giant to compete with global firms such as Netflix
Seven Network owner Seven West Media (SWM) is to merge with fellow Australian outfit Southern Cross Media, amid an increasingly competitive local industry.
The companies told the Australia Stock Exchange that Southern Cross would be the 50.1% majority shareholder if the deal completes, with Seven West taking a 49.9% stake.
Pre-tax ‘synergy’ savings from areas such as duplicated corporate costs are estimated to come in at between A$25m-A$30m, with the resultant company - which is yet to be named - holding “strong positions in the Australian advertising market” across FTA television, streaming, audio, digital and publishing.
The deal, which is subject to regulatory approval, would be led by Seven West chief exec Jeff Howard, with Southern Cross chief overseeing audio.
SWM shareholders would get 0.1552 shares in Southern Cross if the merger is completed, and the former’s chairman Kerry Stokes would step down from his role next year and be replaced by Southern Cross chairman Heith Mackay-Cruise.
Aside from local broadcaster Seven, SWM - valued at A$230m - also operates sibling streamer 7plus and owns news titles such as The West Australian.
Southern Cross - valued at A$213m - is Australia’s biggest radio broadcaster, with 99 brands across the country including Triple M and Hit Network.
SWM’s Howard said the combination marked “a pivotal moment for Australian media” that would create “a truly national, diversified media organisation with extensive scale and reach across our free-to-air television, streaming, audio, digital and publishing assets.”
Mackay-Cruise added that the new firm would create a “one-stop shop” for advertisers.
The deal would be the latest to hit the Australian media landscape, which has seen companies consolidating to compete against streamers such as Netflix and tech firms including Meta.
Sports streamer DAZN completed its acquisition of Australian broadcaster Foxtel for £1.7bn earlier this year, while the future of Paramount-owned Network Ten is unclear following the US studio’s merger with Skydance.
SWM shares rose more than 7% on today’s news, with Southern Cross up 6%.
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