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Fairfax buys NZ papers for $645m
SYDNEY, Australia (CNN) -- Australian media group John Fairfax Holdings said Monday it will buy the assets of New Zealand's biggest publishing business, Independent Newspapers Ltd (INL), for NZ$1.188 billion ($645 million). INL is controlled by Rupert Murdoch's News Corp. Fairfax publishes three of Australia's most prominent newspapers -- the Australian Financial Review, the Sydney Morning Herald, and the Melbourne Age -- as well as regional and community papers. The INL deal gives Fairfax a significant entry to the New Zealand media market and pits it against Tony O'Reilly's APN News & Media Ltd, which controls Wilson & Horton, publisher of the country's biggest newspaper, the Auckland-based New Zealand Herald, and nine other dailies. INL publishes metropolitan daily newspapers in Wellington and Christchurch, two national Sunday newspapers, 7 regional dailies and 61 community newspapers, as well as 13 magazine titles. It also owns the Gordon & Gotch distribution business, the Stuff Web site business and a commercial printing business. INL said the deal excludes its 66 percent holding in pay-TV provider Sky TV and its sole Australian newspaper, the Geelong Advertiser, in Victoria. However INL chairman Ken Cowley said INL was considering offers for the Advertiser which, if accepted, would value the combined Australasian publishing interests at NZ$1.25 billion. Fairfax CEO Fred Hilmer called the deal a "major step forward" for the company. "It extends our print franchise and adds to our critical mass as a leading media company," he said. Fairfax said the purchases would be funded through a combination of underwritten debt (65 percent) and equity (35 percent). The deal, which is subject to various conditions and approvals, is expected to close by July 1 this year.
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