The Strategist

Fiat Chrysler and CIR Holding To Combine Their Media Assets

03/03/2016 - 14:30

As Italian Compagnie Industriali Riunite (CIR) and the Fiat Chrysler Automobiles (FCA) reported yesterday in a joint statement, they decided to merge their publishing assets. The merger, which may give rise to consolidation in the print media market in Italy, will be carried out through an exchange of shares and will, according to its members, form one of Europe's largest companies in the daily news and digital sector.

Robilant Associati Studio -
Robilant Associati Studio -
The unexpected joint statement of the two companies came out yesterday evening after the close of trading in Milan. The participants of the transaction are the publishing company Gruppo Editoriale L`Espresso, 54% of which is controlled by Compagnie Industriali Riunite (CIR) of entrepreneur Carlo De Benedetti and ITEDI SpA, which 77% are  owned by the Fiat Chrysler Automobiles (FCA), and the family Agnelli through it. Gruppo Editoriale L'Espresso publishes newspapers and magazines, including La Repubblica, and ITEDI’s portfolio includes such publications as La Stampa and Secolo XIX. At the same time, the center-left La Repubblica (founded in 1976) and the centrist La Stampa (founded in 1867) is one of the largest daily newspapers in Italy. In the statement, CIR and ITEDI noted that the merger will form "a leading publishing group" in Italy and "one of the largest European groups in the sector of digital dailies and news." Moreover, all publications will retain their names familiar to readers.

The merger of these media assets will take place through the exchange of shares, following which the CIR will own a controlling 43% in the combined structure, and FCA will receive 16%. Ital Press Holding, which is a minority shareholder in ITEDI, will receive another 5%. According to the joint statement, the final agreement on the merger must be signed no later than 30 June 2016, and the transaction can be completed in the first quarter of 2017 if approved by respective regulators. According to the merger participants’ estimates, the total income of the two publishing companies in 2015 amounted to € 750 million with a high level of profitability and the complete absence of debt. In total, all editions of the two companies have "about 5.8 million readers of the paper version, and more than 2.5 million unique site visitors per day."

This transaction is not only the first significant step in the process of consolidation of the Italian printed media market, but also marks that FCA starts getting rid of the publishing business. Along with a share of ITEDI, FCA, also has a share of 16.7% in the publishing company RCS MediaGroup. Upon completion of the merger transaction with the publishing assets of CIR, FCA will distribute all of its stake in the joint structure between holders of its ordinary shares. As a result, the Agnelli family, which owns about 30% in the FCA, will only have a 5 percent stake in the joint editorial structure. In addition, FCA in the near future will distribute its entire 16.7 percent stake in RCS between the holders of its ordinary shares. Commenting on these plans, FCA’s management explained that they "correspond to the company's desire to focus on the key (motor) business."  


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