The Australian Competition and Consumer Commission has approved Fairfax Media’s 50% merger with Antony Catalano’s Metro Media Publishing business, publisher of Melbourne real estate advertising glossy The Weekly Review.
The ACCC said last night on its website it was not opposed to the $35 million cash and $35 million assets arrangement that sees Fairfax’s 32-masthead suburban stable rolled in to the new super-entity, valued at around $140 million. Fairfax will command four seats on the MMP board.
The regulator commenced a lengthy review under its Merger Review Process Guidelines in February, and later sought more information from both sides of the tie-up on two separate occasions. The timeline was suspended twice, pushing decision day back a month from the initial date of April 19. Other interested parties were also tapped.
The Weekly Review, which first hit two years ago, has smashed Fairfax’s Melbourne Weekly for property ad supremacy in Melbourne’s leafy eastern and north-eastern suburbs. It had ripped more than $20 million out of Fairfax’s treasured real estate revenue, which it partly uses to subsidise its journalism initiatives.
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Fairfax’s existing community footprint of 1.25 million households will now be combined with The Weekly Review‘s 220,000 circulation, creating a bolstered entity to take on News Limited’s REA Group. It is not known whether the Melbourne Weekly will continue in its current guise, as Fairfax’s Domain brand migrates across to the MMP stable.
The merger, first foreshadowed by Crikey last November, will leave Catalano as CEO and managing director of MMP. Fairfax acquired its stake by securing stakes from a number of MMP shareholders that included leading real estate agents.
In an internal email to Fairfax staff, obtained by Crikey, Fairfax “Marketplaces” executives Nic Cola and Tony Blamey said:
“The ACCC decision is a great outcome for both businesses, staff and clients, because it presents us with opportunities for growth and ensures a positive, customer-focused future for our FCN business.
“Fairfax and MMP are both committed to further development of the business model that includes providing real estate agents with the opportunity to participate in product development. Therefore, the merger will also mean that our clients are much more aligned to our future business.”
Catalano was equally effusive:
“The merger will position the new entity as a significant media player in the Victorian market.
“The scale of the merged businesses will provide us with the opportunity to grow into new markets and to develop new products to better suit readers and advertiser needs.
“On a personal level, I am thrilled to reconnect with the enormous talent pool that exists within Fairfax. I spent 18 years working for Fairfax and have great regard for its people and its brands. I am looking forward to the many talented Fairfax Community Network and Metro Media Publishing staff coming together and continuing to grow our business.”
Rumours were circulating this morning that a new Catalano-helmed website will be set up to complement Domain.
It is not known if the merger will lead to wage-led synergy savings considering Fairfax is already running an extremely lean operation. Staff briefings will be held tomorrow morning at Fairfax’s Media House HQ and tomorrow afternoon at Dandenong and Airport West.
Fairfax shares were stagnant at a record low of 65 cents in early trade.