Meredith
Corporation (MDP) announced Sunday evening that it will acquire Time Inc.
(TIME), the U.S. publisher of Sports Illustrated, Fortune and Time magazines,
in a deal valued at $2.8 billion.
“We are
adding the rich content-creation capabilities of some of the media industry's
strongest national brands to a powerful local television business that is
generating record earnings, offering advertisers and marketers unparalleled
reach to American adults,” Meredith Corporation Chairman and CEO Stephen M.
Lacy said in a statement. “We are also creating a powerful digital media
business with 170 million monthly unique visitors in the U.S. and over 10
billion annual video views, enhancing Meredith's leadership position in
reaching Millennials.”
Under the
agreement, Meredith, which publishes Better Homes & Gardens, Family Circle
and owns Allrecipies.com, will acquire all outstanding shares of Time for
$18.50 a share. The company said the deal is expected to close during the first
quarter of calendar 2018. Meredith said it expects to generate cost synergies
of $400-$500 million in the first two full years of operation.
Meredith’s bid
to buy the publisher is backed by billionaires Charles and David Koch, who
provided $650 million in preferred equity through a unit of Koch Industries
called Koch Equity Development (KED). However, Meredith said KED will not have
a seat on its board, nor will it have influence on its editorial or managerial
operations.
I am very
excited to see the growth that comes from this acquisition. Time is such an
influential part of our culture; it will be interesting seeing where new
ownership takes it and how the platform changes, improves or alters. I see this
as a highly profitable move on Meredith’s part and I m excited to see the
public react.
http://www.foxbusiness.com/markets/2017/11/26/meredith-to-acquire-time-inc-in-2-8b-deal.html
Interesting article, this appears to be a massive deal that could shake up some industries. Do you think this acquisition could result in a future monopoly? Do you think Meredith will continue to be involved in large acquisitions like these?
ReplyDeleteWith an acquisition of this size, I'm sure Meredith's operating costs in respect to output will go down significantly. I believe this is key to their continued success because as society moves closer and closer to a world focused around technology, I would predict that sales of their print copies shift to sales of electronic copies. There are a few things to watch out for during this process though. I think the increasing amount of free news that is available will hurt their sales, but also the decreased reliability of news sources could help them and boost their sales. We'll have to wait and see what happens.
ReplyDeleteThis is a very interesting article. This basically shows how big businesses are trying to diversify and expand into other markets. Time magazine would be a very valuable and diverse investment for Meredith INC. It shows how businesses in today's economy are trying to increase their revenues through new ventures; I would be very interested to see if this move proves to be a success and if other companies follow suit.
ReplyDeleteVery interesting article! Big business diversifying their investments is a good sign for the economy. What are your thoughts on the the future of this industry?
ReplyDelete