In a move that will shake up the British newspaper industry, owners of Daily Mail have confirmed they are buying rival newspaper The Telegraph in a deal worth GBP500 million (US$650 million).
If finalised, it would make DMGT, Daily Mail owner, one of the most powerful media companies in the UK – which is sure to raise the hackles of the antitrust watchdogs in the country.
The announcement comes a week after RedBird Capital had pulled out of a deal to buy the Daily and Sunday Telegraph for GBP500 million (US$650 million).
BBC reported that RedBird’s previous attempt to buy The Telegraph was rebuffed by politicians as it was majority-funded by Abu Dhabi’s IMI Group, owners of brands like Sky News Arabia, The National, CNN Business Arabic and Al-Ain News.
“A law change meant that foreign sovereign wealth funds could take a maximum stake of 15 per cent in newspapers or periodicals. The new bid complied with that rule, but it is understood that the government intended to submit the deal to regulatory review,” BBC had added.
The DMGT transaction would comply with the UK’s Foreign State Influence regime as there will be no foreign state investment or capital in the funding structure.
In a statement released on Saturday, DMGT said it had signed an agreement with Redbird IMI over the acquisition of the Telegraph Media Group (TMG).
The parties have now entered a period of exclusivity to finalise the terms of the transaction and to prepare the necessary regulatory submissions, which they expect to happen quickly.
DMGT added: “We believe that the proposed acquisition would give much-needed certainty and confidence to TMG’s employees and ensure that the Daily Telegraph’s exceptional journalism can flourish long into the future and on the world stage.
“The Daily Telegraph would join DMGT’s stable of independent and diverse media brands, including the Daily Mail and The Mail on Sunday, Metro, The i Paper, and New Scientist. TMG would benefit from DMGT’s significant resources and experience in transforming media brands in a digital world and growing British brands into global news operations.”
Adding that The Daily Telegraph would remain editorially independent from other titles in the group, DMGT said it plans to invest substantially in TMG with the aim of accelerating its international expansion. It will focus particularly on the USA, where the Daily Mail is already successful, with established editorial and commercial operations.
Lord Rothermere, Chairman, DMGT, commented: “I have long admired the Daily Telegraph. My family and I have an enduring love of newspapers and for the journalists who make them. The Daily Telegraph is Britain’s largest and best quality broadsheet newspaper, and I have grown up respecting it. It has remarkable history and has played a vital role in shaping Britain’s national debate over many decades.
“Chris Evans is an excellent editor, and we intend to give him the resources to invest in the newsroom. Under our ownership, the Daily Telegraph will become a global brand, just as the Daily Mail has.”
