Nine Network to take over Fairfax in estimated $4bn deal (Australia)

. Nine Entertainment has announced a takeover of Fairfax Media in a surprise deal worth an estimated $4bn.

The merger, which the television network claims will create Australia’s largest integrated media player, was announced to the stock market on Thursday.

Nine will take a controlling 51.1% share in the new business with Fairfax taking the rest. The combined entity will take the name of Nine’s parent company, Nine Entertainment Co, or NEC.

Hugh Marks of Nine will be the new chief executive and Peter Costello, the Nine chairman, will now lead the board of the new business.

Under the terms of the proposed transaction, Fairfax shareholders will receive 0.3627 Nine shares for each Fairfax share held and $0.025 cash. It represents a 21.9% premium to Fairfax’s closing share price of 77c on Wednesday.

It will also “review the scope and breadth” the newly merged business with job losses expected at Fairfax in backroom roles such as finance and human resources.

Although Marks said on Thursday that the main motivation was to get hold of Fairfax’s TV streaming asset Stan and its property business Domain, Nine said there were no plans to close the newspapers.

On a call to investors and business analysts, Marks said news was an important part of both Nine and Fairfax and the two newsrooms would now have multiple platforms to distribute their content on.

Fairfax’s chief executive, Greg Hywood, who will remain for about six months but will then depart the business entirely, said on the same briefing that Nine has a “great history of journalism” and he believed the television company was “a great home for the mastheads”.

Marks gave a media conference in Sydney on Thursday morning to talk about the deal which came after Nine approached Fairfax at the beginning of July.

When trading in Fairfax shares restarted on Thursday morning they jumped 13%. Shares in NEC were down 6.5%.

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