How Will Southern Cross and Seven West Media’s Merger Reshape Australian Media?
Southern Cross Media Group and Seven West Media have agreed to merge, creating a dominant integrated TV, audio, and digital platform in Australia. The deal promises significant cost synergies and shareholder value accretion, pending regulatory and shareholder approvals.
- Merger to create leading integrated TV, audio, and digital media platform
- SWM shareholders to receive 0.1552 SCA shares per SWM share
- Expected $25-30 million annual pre-tax cost synergies and revenue growth
- SCA shareholders to own 50.1%, SWM shareholders 49.9% of combined group
- Unanimous SWM Board recommendation and key management roles agreed
A New Era in Australian Media
Southern Cross Media Group Limited (SCA) and Seven West Media Limited (SWM) have announced a landmark merger agreement that will reshape the Australian media landscape. The proposed merger aims to combine their broadcast and digital assets into a leading integrated platform spanning television, audio, and digital channels.
The transaction, structured as a scheme of arrangement, offers SWM shareholders 0.1552 SCA shares for each SWM share, resulting in a near-equal ownership split with SCA shareholders holding 50.1% and SWM shareholders 49.9% of the combined entity. This balance reflects the strategic intent to create a unified media powerhouse with broad reach across metropolitan and regional markets.
Strategic and Financial Upside
Management anticipates annual pre-tax cost synergies between $25 million and $30 million, primarily from eliminating overlapping corporate overheads and consolidating facilities. Beyond cost savings, the merger is expected to unlock incremental revenue synergies through enhanced cross-platform advertising solutions and shared content strategies.
Importantly for investors, the deal is forecast to be more than 100% accretive to SCA’s earnings per share in the fiscal year 2026, underscoring the financial benefits of scale and diversification. The combined group will leverage a portfolio of leading brands targeting the critical 25-54 demographic, a key audience for advertisers.
Governance and Leadership
Leadership roles have been agreed upon with Jeff Howard, current CEO of SWM, appointed as Managing Director and CEO of the merged group. John Kelly, CEO of SCA, will take the role of Group Managing Director, Audio, reflecting the importance of audio platforms such as LiSTNR and the Hit and Triple M networks.
Kerry Stokes AC will serve as Chair until February 2026, after which Heith Mackay-Cruise, current SCA Chairman, will assume the role. The board will initially comprise five nominees from SWM and three from SCA, ensuring balanced representation and continuity.
Regulatory and Shareholder Approvals Ahead
The merger remains subject to customary regulatory approvals from the Australian Competition and Consumer Commission (ACCC), the Australian Communications and Media Authority (ACMA), the Australian Securities and Investments Commission (ASIC), and the ASX. While some divestments may be required under media ownership laws, these are expected to be immaterial relative to the combined group’s scale.
SWM’s board has unanimously recommended the merger to its shareholders, with SGH Limited, a significant SWM shareholder holding 40.2%, indicating support. SCA shareholders will receive an independent expert report assessing the merger’s merits, and SCA retains a fiduciary out to consider any superior proposals.
Looking Ahead
The merger aligns with SCA’s strategic vision supporting media consolidation to enhance competitiveness and value creation. The combined entity will offer advertisers a seamless, scalable platform to engage Australia’s most valuable audiences across TV, audio, and digital channels.
With the transaction expected to close by the first quarter of 2026, stakeholders will be watching closely as regulatory reviews progress and shareholder meetings approach. The integration phase will be critical to realising the anticipated synergies and growth opportunities.
Bottom Line?
As Southern Cross and Seven West Media move toward integration, the Australian media sector braces for a new dominant force with broad implications for audiences and advertisers alike.
Questions in the middle?
- Will regulatory authorities impose conditions that could alter the merger’s scope or timing?
- How effectively will the combined group capture the projected revenue synergies beyond cost savings?
- What impact will the merger have on competition and content diversity in regional versus metropolitan markets?
