Zurich press group Tamedia is to acquire the Bernese Espace Media group in a major deal aimed to capitalise on a shift in usage and advertising to the internet.
Tamedia, the owner of the Tages-Anzeiger newspaper and the free newspaper 20 Minuten, said on Thursday it would pay SFr205 million ($166.9 million) for 80 per cent of Espace media, which owns the Berner Zeitung and the Bund newspapers.
The Zurich-based media group would also issue 600,000 Tamedia shares as part of a capital increase, it said in a statement.
"The aim is to boost innovation activities and quality as well as to jointly launch new media projects in the areas of print, online and e-media," it stated.
The Swiss media scene is dominated by a few companies, in particular Ringier, Tamedia, NZZ and Edipresse.
Espace Media Groupe, whose origins date back to 1888, and Tamedia, which emerged from the Tages-Anzeiger newspaper founded in 1893, have been affiliated for many years. Since 1990 Tamedia has held a 49 per cent stake in the daily Berner Zeitung, which itself holds a 15 per cent stake in the Sunday newspaper SonntagsZeitung.
Cooperation was expected to be increased following the acquisition by the Berner Zeitung of a 17.5 per cent stake in the free newspaper 20 Minuten.
Analysts said the merger fitted the picture of an ongoing consolidation in the Swiss media sector.
"Tamedia's consolidation move comes at an acceptable price," analysts at Zurich Cantonal Bank told Reuters.
"The environment for shares in media companies remains favourable, especially as job ads are booming in a way they have not done in years."
But Swiss media unions and associations were more down to earth.
"It's questionable whether independent newspapers can still be produced in Bern," said Urs Thalmann, secretary-general of the Impressum journalists' association. "Every new consolidation leads to reduced competition and less pressure on individual media organisations to stand on their own and work independently."
The media union Comedia said it was alarmed about the "dangerous concentration of media" and the impact of the merger on jobs.
It called on Tamedia to guarantee the diversity of job locations and media, and especially independence: "Otherwise the monopoly situation will just get bigger – we are already reading the same things everywhere".
Under Switzerland's new broadcasting legislation, which limits the number of private radio licences to two per provider, Tamedia and Espace are required to sell one private radio station each.
The existing owners of Espace media, the Erwin Reinhardt-Scherz and Charles von Graffenried families, along with the Espace group management will acquire a 5.7 per cent stake in Tamedia through the share issue. Charles von Graffenried will remain editor of the Berner Zeitung and president of Espace's executive board.
"The liberal-democratic direction of the various media entities edited by the Espace Media Groupe will be maintained in this new media grouping," it stated.
However, the overall planned merger still requires final approval from the Competition Commission.
swissinfo with agencies
Tamedia, a leading Swiss media group based in Zurich, operates within four business sectors: newspapers, magazines, electronic media (radio, TV, internet) as well as printing and logistics.
It owns 14 newspapers and four magazines, including the daily newspaper Tages-Anzeiger, the Sunday newspaper SonntagsZeitung, the free newspapers 20 Minuten/20 Minutes and the weekly magazine Facts. The group also owns the television station TeleZüri and two radio stations, Radio 24 and Radio Basilisk.
Espace Media Groupe is based in Bern and owns eight newspapers, including the daily newspapers Berner Zeitung and Bund and three magazines. The group also owns the television station TeleBärn and two radio stations, Capital FM and Canal 3.
Turnover SFr723.6 million (+11%)
Net profit SFr98.4 million (+23%)
Espace Media Groupe
Sales: SFr250 million(-4.5%)
Net profit: SFr17.6 million (-6.4%)