Newspaper group Trinity Mirror agreed on Friday a £126.7m deal to acquire the Express and Star titles from Richard Desmond's Northern & Shell group after more than a year of negotiations.
The Daily Mirror's parent company had initially only sought a minority stake in Desmond's publishing empire, but cited "strong strategic rationale" behind the move to buy the publishing assets, which also include celebrity magazines OK! and New!
Trinity Mirror said the purchase price of £126.7m would be made through an initial cash consideration of £47.7m, a deferred cash consideration of £59m payable over 2020-23 and the balance of £20m in new ordinary shares.
The Mirror group said it would also pay into Northern & Shell's pension scheme a total amounting to £70m.
The company said the acquisition would create "a media business of scale to better serve our readers and advertisers", by reducing duplication, sharing content and skills, raising its profile with advertisers and improving its digital offering.
Falling ad revenues
Indeed, the acquisition comes as the newspaper industry has been suffering from the effects of changing readership habits as internet rivals - with lower productions costs - offer cheaper alternatives to the way customers digest their news.
This has resulted in declining advertising revenues for print journalism, underlined by Trinity Mirror on Friday in a separate earnings announcement that showed an 11% fall in its print revenues.
Simon Fox, chief executive of Trinity Mirror, said: "This deal is a really exciting moment in Trinity Mirror’s history, combining some of the most iconic titles in the UK media industry.
"It is good for our readers, good for our customers and good for our shareholders. Northern & Shell’s titles have a large and loyal readership, a growing digital presence and a stable revenue mix and offer an excellent fit with Trinity Mirror."
Richard Desmond, chairman of Northern & Shell, said: "Today’s transformational transaction is a logical and natural next step in the evolution and consolidation of the media sector and will create a larger and stronger platform serving all stakeholders.
"In Trinity Mirror we have a great partner, who will be an excellent steward of the business going forward and I am delighted to be able to retain an ongoing interest in the combined group."
Investors welcomed the deal, pushing shares in Trinity Mirror 6.94% higher to 74.64p on the London Stock Exchange.