(Reuters) - Finnish media group Sanoma Oyj (SAA1V.HE) is buying rival Alma Media’s (ALMAC.HE) regional news media business in a 115-million-euro deal (£96.86 million), it said on Tuesday, putting the country’s two largest daily newspapers in the hands of the same owner.
Shares in both companies jumped to eight-year highs on the news at the market opening, with Alma up 8.4% and Sanoma rising 7.6%, as Sanoma said the deal would result in cost savings and boost its digital media business.
This highly synergistic bolt-on acquisition is an important investment in the growth of Sanoma’s digital subscription base, and in the sustainable future of independent domestic journalism in Finland,” Sanoma said.
Sanoma, which owns Finland’s biggest daily newspaper Helsingin Sanomat, will acquire its second biggest daily Aamulehti, founded in 1881, as part of the deal. Alma will retain ownership of the country’s main business daily Kauppalehti.
Sanoma will also acquire 14 regional newspapers, and a printing house in Tampere under the deal.
“Alma Media’s regional titles have strong brands and customer base in their regions and are complementary to our news media offering,” Pia Kalsta, head of Sanoma Media Finland, said in a statement.
Sanoma said the deal includes 42 million euros of net debt and subscriptions already paid for at the end of 2019. The deal will create annual synergies of 13 million euros, it said.
Alma Media said in a separate statement that it would book a capital gain of 58 million euros when the deal is closed, expected by late 2020.
The units Alma is selling had preliminary, unaudited revenues of 99 million euros in 2019, and a pro-forma adjusted operating profit of 10 million, Alma said.
Reporting by Tarmo Virki in Tallinn; Editing by Uttaresh.V and Susan Fenton