Meredith Corporation (NYSE:MDP) announced Sunday evening that it will acquire Time Inc. (NYSE: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.
Earlier this year, as well as in 2013, Meredith held unsuccessful talks to acquire Time. Its 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.
Amid a slowdown in print media, Time cut 300 employees, around 4% of its workforce, as part of a strategic plan to revamp its business to focus on the world of digital media.