Farm progress and parent to merge with Fairfax.

Fairfax Media (Wellington, NZ), the publisher of newspapers, including "Australian Financial Review," for the New Zealand and Australian markets, has acquired the assets and will merge with Rural Press Ltd. (North Richmond, NSW), the publisher of over 200 regional and agricultural magazines and newspapers for the Australian, New Zealand and U.S. markets, for $2.1 billion, or about 3.6x Rural Media's 2005 revenue of $583 million. The deal includes Rural Press subsidiary Farm Progress (Carol Stream, IL), the publisher of agricultural periodicals across the U.S.

Rural Press is made up of four main divisions. The Regional Publishing division produces over 160 newspapers and magazines, including property, automobile, and employment periodicals, for Australian and New Zealand audiences. The Agricultural division publishes more than 50 newspapers and magazines in Australia ("Australian Cotton Outlook," "Australian Landcare" and "Good Fruit & Vegetables"), New Zealand ("The Dairyman" and "AgTrader") and the U.S., including 20 periodicals, such as "Rural Life," "Farm Futures," "American Agriculturalist" and "Southern Farmer," produced by Farm Progress. Rural Press also has a Printing division and a Broadcasting division that operates six radio stations.

As part of the arrangement, each Rural Press ordinary or preferred shareholder will receive two Fairfax Media shares and A$3.30 in cash or 2.3 Fairfax Media shares and A$1.80 in cash for each share of Rural. Rural shares were trading at around A$13.50 after the merger was announced compared to about A$11.70 before the deal was announced. In addition, Rural Press will also distribute a special dividend of 57 cents for each ordinary share and 63 cents for each preferred share.