Renowned New Zealand-based broadcaster, MediaWorks has reportedly announced that it has signed a conditional agreement with Australian outdoor advertising company QMS Media to merge its New Zealand business units, in a recent round of industry consolidation.
Reports cite, under the agreement, the media firms would be merging QMS Media’s New Zealand advertising business units with MediaWorks’ extensive portfolio of radio & TV stations.
According to a report by The New Zealand Herald, the merger would be creating a new entity that would be capable of offering television, radio, digital as well as out-of-home advertising across New Zealand. Oaktree, the hedge fund owner of MediaWorks, would hold a majority stake of 60% in the new entity, while the remaining stake would be owned by QMS Australia.
The Chairman of MediaWorks, Jack Matthews stated that, with the proposed merger, the company would be capable of enhancing its ability to provide top-quality local content as well as effective advertising solutions to the customers. Matthews further added that the merger would represent a significant commitment to & investment in New Zealand.
Reports claim, the deal comes as the industry experiences a consolidation period with even dominant players like Stuff & NZME attempting to merge their respective businesses, a move that did not receive the approval from the nation’s Commerce Commission due to fears that it might significantly diminish the width of the news commentary & coverage. Meanwhile, Fairfax Media & Nine Entertainment recently announced the completion of their merger in Australia.
For the record, QMS’s New Zealand unit generated $40.9 million in ad revenue in June 2018, which was lower than its previous year’s $44 million. On the other hand, MediaWorks is coming closer to profitability, with losses of about $5.7 million in 2017, down from $14.8 million in the earlier year.
According to reports, the merger would be subject to binding terms that are being finalized. If successful, the merger is scheduled to be completed by the second quarter of 2019.