Fairfax Media will have controlling interest in a merger between its radio stations and the Macquarie Radio Network.
In the deal, Fairfax will get about $18 million in cash and a 54.5% shareholding in the enlarged Macquarie Radio Network, which will remain a listed entity.
Among the talent in the deal are top rating announcers Alan Jones and Ray Hadley at Sydney’s 2GB.
Greg Hywood, Fairfax CEO, said the merger is expected to unlock significant value. Fairfax will be the majority shareholder in a stronger national radio network, including the leading news, talk and sport stations in Sydney and Melbourne.
Fairfax has at the same time also entered into an agreement to sell its Perth-based 96FM to APN News and Media Limited for $78 million. This gives APN a radio station in each of the mainland state capitals.
The Macquarie deal consolidates stations across Australia, including 2GB and 2UE in Sydney, 3AW and Magic 1278 in Melbourne, 4BC and Magic 882 in Brisbane and 6PR in Perth.
Macquarie will divest its 2CH station and Macquarie Regional Radio network to comply with regulatory requirements of the merger.
“The merger creates a genuine national talk radio network that was not previously available to advertisers,” Hywood says. “The merger provides both cost and revenue synergies from enhanced network and sales opportunities that will create a more efficient and effective network for news, talk and sports radio along with music stations.”
The combined company will be led by Macquarie’s chief executive Russell Tate for an interim 12 month period, with Fairfax radio managing director Adam Lang appointed chief operating officer.
Disclosure: Fairfax Media owns 100% of Allure Media, the publisher of Business Insider.