Major media company, Meredith (MDP), announced its takeover of Time magazine publisher, Time Inc., on Sunday. The purchase was made for $2.8 million and automatically grants Meredith control of all of Time’s related magazine investments.
Meredith is already the proud owner of a number of top magazines. These include Parents, Shape, and Better Homes & Gardens.
However, with the acquisition of Times, Meredith now has control over major entertainment and business magazines such as People, Sports Illustrated, Fortune, and Entertainment Weekly.
However, the agreement to buy the 95-year old publisher has come with its own problems. Meredith’s move to acquire Time Inc. came with a hefty $2.8 billion price tag.
The company borrowed almost $3.6 billion from a number of lenders to see the deal to fruition. Meredith now plans to sell a big part of the newly acquired business.
The proposed deal will bring in almost $650 million to Meredith, and will allow the Koch brothers an opening into Meredith’s holdings.
The Koch brothers, Charles and David, are extremely wealthy investor-donners who are staunch financial supporters of the Republican Party and other conservative causes.
However, Meredith has already stated that while the Koch brothers will have a share in the earnings, they will not have seats on the board. Thus, the Koch brothers will not “influence” Meredith’s operations in any way.
Commenting on the deal, Meredith stated that the Koch brothers’ investment proved the “unlocked value” the company had gleaned through the merger. Although Time magazine no longer holds the importance it once did, Meredith believes there could be a great future for the merged companies.
Speaking of the merger in a statement, Meredith’s President, Tom Harty stated that the deal would be “transformative”.
He stated that the combination of local businesses with the “trusted premium multiplatform content creation of Meredith and Time Inc.” would result in the birth of a “powerful media company”.