MILAN — In a surprise announcement Wednesday evening, Italian publishing companies Gruppo Editoriale L’Espresso, controlled by Carlo De Benedetti’s Compagnie Industriali Riunite, and ITEDI SpA, owned by Italian carmaker Fiat Chrysler Automobiles, said they would merge their publishing operations to create Italy’s “leading publishing group.”
The two companies revealed the move in a joint statement released after the close of trading in Milan, in which they said the new entity “will also be one of the main European groups in the sector of daily and digital news.”
The operation calls for the merger by incorporation of ITEDI — an editorial group in which FCA has a 77 percent controlling stake and which includes national dailies La Stampa and Secolo XIX, among others — into L’Espresso, which controls publications including national daily La Repubblica and weekly L’Espresso and other assets including radio and TV stations.
In what might have been a hint of things to come, in January La Stampa’s editor Mario Calabresi left the Turin-based paper to become the new editor of Rome-based La Repubblica.
The merger would come about through an all-share transaction following which CIR —which currently owns 54 percent of L’Espresso — would own a controlling 43 percent stake in the combined entity, while FCA would hold about 16 percent. FCA’s minority partner in ITEDI, Ital Press Holding SpA, will own five percent of the combined entity.
The parties must enter into “definitive agreements no later than June 30, 2016,” in order for the agreement to be binding and the operation is slated to close — following “the necessary regulatory approvals” — in the first quarter of 2017, the companies said.
Once the merger has been completed, FCA will be able to exit the publishing business, where it is present with stakes both in ITEDI itself and in Italian publishing company RCS MediaGroup SpA. In a separate statement, FCA — which controls Italian automaker Fiat and U.S. carmaker Chrysler — said that following conclusion of the merger it will distribute its entire interest in the enlarged Espresso group to the holders of its common shares. This means that Italy’s Agnelli family, which controls about 30 percent of FCA through its listed Exor holding company, will end up with a five percent stake in the combined publishing group.
FCA also said that prior to proceeding with the merger and distribution of Espresso shares, it will distribute its entire 16.7 percent stake in RCS — the largest single shareholding in the publisher — to holders of its common shares. Following the distribution of RCS shares, Diego Della Valle, chairman and chief executive officer of Tod’s Group SpA will become the publisher’s second-largest shareholder: He currently owns 7.3 percent of RCS, according to data from Italy’s stock market regulator Consob; Italian bank Mediobanca will be the largest single shareholder, with its 9.9 percent stake.
FCA said the operation is “consistent with its desire to increase focus on its core [automotive] business” and that it has the “potential for significant revenue and synergies.”
The combined enterprise would have had 2015 revenues of 750 million euros, or $817.5 million, the companies said in their separate statements. They have “the highest profitability of the sector, and no debt burden.” Overall the publications reached “approximately 5.8 million readers and [more than] 2.5 million unique users per day of their news Web sites.”