US magazine publisher Time Inc. will be bought by rival media company Meredith Corporation for $2.8bn (£2.1bn).
The deal is backed by the billionaire brothers Charles and David Koch, who are known for supporting economically conservative causes.
Meredith is an Iowa-based publisher and broadcaster which has made two previous unsuccessful bids for Time.
Time has struggled with declining advertising revenues since it was spun off from Time Warner in 2014.
In November, Time’s third quarter revenue slipped 9.5% to $679m, marking the sixth straight quarter the publisher fell short of analysts expectations.
“This all-cash transaction, and the immediate, certain value it provides, is in the best interests of the company and its shareholders,” Time’s Chairman John Fahey said in a statement.
Meredith owns print publications Family Circle and Better Homes and Gardens as well as local television stations across the US.
The company said the deal will give it nearly $700m in digital advertising revenues and an “unmatched reach” to the valuable millennial customers, in their twenties and thirties.
As part of the deal, Meredith has secured $650m from the Koch brothers’ private equity arm, Koch Equity Development.
The two brothers run Koch Industries, which is one of the world’s largest privately-owned companies, with interests ranging from pipelines to paper towels.
According to the Koch Industries website, “to millions of Americans, the words ‘Koch brothers’ and ‘political activism’ go hand-in-hand”.
They’ve long championed economically conservative candidates and causes, but they’ve also pushed criminal justice reform and made large donations to the American Civil Liberties Union.
Their involvement in a media deal is likely to raise concerns that they’ll use their investment to wield influence.
A suggestion they might attempt to acquire the Los Angeles Times and Chicago Tribune in 2013 sparked petitions and protests from readers concerned about their intentions.
However, Meredith said the Koch brothers won’t be given a seat on the board of Time Inc, and won’t have any managerial or editorial input.
Source: BBC
