APN has found a buyer for its Australian Regional Media (ARM) business, with News Corp agreeing to purchase the newspaper arm of the media company.
The deal was confirmed a short time ago, with News Corp releasing a statement saying that it has entered into an agreement to purchase the APN Australian regional newspapers for $36.6 million.
News Corp Australia executive chairman, Michael Miller, says the 12 daily newspaper including The Sunshine Coast Daily and The Gympie Times, along with the 60 smaller publications in APN's Australian Regional Media (ARM) portfolio reach 1.6 million people across print, online and mobile.
"We look forward to working with ARM team to secure the purchase of these strong newspaper brands in the growing regional centres in Queensland where we currently don't have a presence."
The proposed purchase includes the ARM printing facilities and should lead to “significant cost and efficiency synergies” through consolidation of production and distribution operations Miller added.
News Corp is an APN shareholder and currently holds 14.9% in APN. As a result APN shareholders will be required to vote on the proposed sale, which is thought to be held in August.
APN announced that it was selling its newspaper offering in February, with CEO Ciaran Davis telling AdNews at the time that while the business was overall in a strong place, the whole sector is challenged and APN wanted to put its investment elsewhere.
"We've been incurring costs in this business for a long time - $40 million over the last three years - and against that backdrop it still does produce some solid results. It's audiences are very good; we took the brave decision to roll out digital subscriptions, that's paying off. There are an awful lot of positives going on in this business.
"The decision that we’ve made is that we absolutely appreciate that digital growth is the future of this business in terms of repositioning it, but it does require a lot of investment. Looking at APN and the opportunity we have with other businesses in the portfolio we're just not prepared to put the investment in it," he added
This news comes just five days after the shareholders unanimously voted to demerge its New Zealand business, New Zealand Media and Entertainment (NZME), with the AFR noting that in the space of one week, APN has effectively exited traditional publishing altogether.
Before the transaction is finalised, approval will need to be gained from the Australian Competition and Consumer Commission (ACCC).
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