JAMAICA – Media giants merge
Jamaica Gleaner and Radio Jamaica join forces
KINGSTON –– The boards of directors of the 180-year-old Gleaner Company and 65-year-old Radio Jamaica have agreed to a merger of their media businesses.
An agreement was signed by both boards yesterday, after which they held a Press conference at the Jamaica Pegasus hotel in New Kingston to explain the developing arrangement.
According to Radio Jamaica’s chairman Lester Spaulding, the current media market is saturated, especially with low economic growth.
“When added to the recent moves by local telecoms companies to enter the media space, heightened competition is sure to put increased pressure on the industry. It is, therefore, very important that Jamaican media look also to shore up their resources in order to engage in the fast-changing landscape, as well as to preserve the independence required for our media to do its work on behalf of the Jamaican people,” he said.
Spaulding told the Press conference that the two media giants would combine their total media business into “the country’s largest and most diverse media and communications organisation”.
The value of the transaction is just over $1.56 billion, and the new entity is expected to have a turnover of approximately $5 billion a year.
Spaulding said that under the agreement Radio Jamaica would acquire, through share purchase, a newly formed subsidiary of the Gleaner Company Limited, to be named the Gleaner Company Media Limited, which will absorb the media operations on existing terms and conditions.
Radio Jamaica’s board will be expanded to 14 members, with seven initially nominated by the Gleaner and seven current directors continuing to sit.
Spaulding will remain as chairman of the board of the expanded group, which will be renamed after the transaction is completed. Current chairman of the Gleaner, Oliver Clarke, will take up the post of deputy chairman.
The management team will be headed by Radio Jamaica’s Gary Allen as chief executive officer, while the Gleaner’s Chris Barnes will be the chief operating officer. They will also sit on the board.
However, the agreement is subject to the approval of the shareholders and the Jamaica Stock Exchange, as well as a Supreme Court’s decision of a “scheme of amalgamation and arrangement and other statutory approvals”.
The new development is expected to raise questions about the concentration of media ownership (also known as media consolidation or media convergence), which is a process whereby progressively fewer individuals or organisations control increasing shares of the mass media.
But, in order to maintain a high level of public participation, when the merger is completed, each Gleaner shareholder will receive one RJR share for every share owned, while continuing to own their Gleaner share. The existing Gleaner Company will continue with its non-media assets under a new name and with its existing shareholders.
Spaulding explained that the result would be a doubling of both media businesses, while effectively having half of Radio Jamaica Limited continuing to be owned by the present shareholders and the other half owned by Gleaner shareholders.
A specific term of the share swap for assets and cash is that Radio Jamaica Limited’s Articles of Incorporation will govern the ownership and in keeping with its broadcast licence, Spaulding said.
“The coming together is good for Jamaican and regional media,” Clarke said.