SCA and Seven West Media propose merger

Audio company Southern Cross Austereo and television and publishing network Seven West Media have announced plans to merge.

The deal would bring a number of major Australian media properties under one roof.

Seven West Media owns the Seven television network, a number of regional TV licences, plus The West Australian, The Sunday Times, and the Community Newspaper Group — which publishes 23 community newspapers in Perth. It also owns The Nightly, a digital-only publication aimed at the eastern states.

Southern Cross Austereo brings Triple M’s 45 radio stations, and the Hit Network’s 41 stations, including Melbourne’s The Fox, and Sydney’s 2DayFM. It also owns the Listnr audio platform, which became profitable during 2024.

Interestingly, SCA recently got out of the TV business, selling its remaining television stations to Seven West Media in July, for $3.75 million.

The deal at a glance:

• The merged entity doesn’t yet have a name.
• Seven CEO Jeff Howard to be MD and CEO of the merged group.
• SCA CEO John Kelly to be Group MD, Audio.
• Seven’s Kerry Stokes to chair until Feb 2026, then SCA’s Heith Mackay-Cruise takes over.
• SWM shareholders will get 0.1552 SCA shares for each SWM share.
• Ownership split: SCA 50.1%, SWM 49.9%.
• $25–30 million annual pre-tax cost synergies expected.
• Expected to be >100% EPS accretive to SCA shareholders.
• Scheme of arrangement, unanimously recommended by SWM’s board (absent a superior proposal).
• Subject to regulatory approvals and shareholder approval.

According to an ASX filing this morning, the proposed merger will save up to $30m in shared costs, and generate additional revenue.

Jeff Howard will be the Managing Director and CEO of the combined group and John Kelly will assume the role of Group Managing Director, Audio.

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Seven chair Kerry Stokes will lead the merged entity board initially, stepping down in February 2026 and transitioning the role to SCA’s current chair Heith Mackay-Cruise.

Following this the combined board will comprise four Seven board members  — Teresa Dyson, Jeff Howard, Michael Malone and Ryan Stokes — and three SCA board members — Heith Mackay-Cruise, Marina Go and Ido Leffler.

Leffler has indicated his intention to continue on the combined board through the acquisition and retire from the board as at 30 June 2026.

The merger, if successful, will create a media company that, on the merged market caps alone, does not quite make it into the “giant” category: around $416m on the latest ASX values.

What the Unmade Index would look like with the merged entity

Under the proposed merger, SWM shareholders will receive 0.1552 SCA shares for every SWM share they own. Following the proposed merger, SWM shareholders and SCA shareholders would own 49.9% and 50.1% of the combined group, respectively.

According to the ASX listing, the merger “combines two highly complementary businesses with strong positions in the Australian advertising market across their free-to-air television, streaming, audio, digital and publishing assets, and will “be strongly positioned to attract and grow high value audiences (25-54), delivering revenue and earnings growth and unlocking significant shareholder value.”

Kerry Stokes was quoted as saying: “The combination of these two companies brings together the best creators of media content in the country, delivering significant financial and strategic benefits for SWM shareholders.

“This is an important merger, as the combined company will be better able to serve both metropolitan and regional viewers, listeners, partners and advertisers. It will add strength to each of the combined businesses’ television, audio, digital and publishing operations across the country.”

Seven’s Jeff Howard said: “This combination marks a pivotal moment for Australian media. By bringing together the complementary assets and brands of SWM and SCA, we are creating a truly national, diversified media organisation with extensive scale and reach across our free-to-air television, streaming, audio, digital and publishing assets.”

SCA chair Heith Mackay-Cruise said: “This merger will create one of Australia’s leading Total TV, Audio and Digital platforms, with the scale, reach and diversification to better serve Australian audiences and communities.

“The combination of SCA’s and SWM’s leading brands on broadcast, audio and digital platforms establishes national leadership across the critical 25- 54 ‘audience that matters’ demographic. The merged entity will offer partners and clients a ‘one stop shop’ for opportunities to reach this valuable audience across all mediums, leveraging shared content and commercial opportunities to add value beyond the initial cost synergy estimates.”

Further details regarding the combined group’s executive team will be agreed at a later stage.