CIR: agreement to merge Gruppo Espresso and ITEDI

The aim of the merger is to create a group that will be leader in Italy and among the most important in Europe in daily and digital news

Chief Executive Monica Mondardini: “Agreement of great industrial value that reaffirms the leadership of Espresso in the Italian printed newspaper sector”

Chairman Rodolfo De Benedetti: “This confirms our commitment to publishing in the long term. Thanks to the excellent management of Espresso in recent years we are creating a group that is larger and stronger. An agreement with important partners for a joint future of new ideas and new projects”

Milan, March 2 2016
– CIR-Compagnie Industriali Riunite S.p.A. announces that it has today signed a memorandum of understanding with its subsidiary Gruppo Editoriale L’Espresso, ITEDI (the company that publishes the newspapers La Stampa and Il Secolo XIX) and the shareholders of the latter (FCA and Ital Press Holding S.p.A. of the Perrone family) aimed at creating the leading publishing group in Italy and one of the main groups in Europe in the sector of daily and digital news, through the merger by incorporation of ITEDI with Gruppo Editoriale L’Espresso. The two publishing companies reported total revenues for 2015 of approximately € 750 million, with the highest profitability in the sector, and have no debt burden.

Monica Mondardini
, Chief Executive of CIR, made the following statement: “This is an agreement of great industrial value for Gruppo Espresso, which with the entry of two authoritative and well-established titles such as La Stampa and il Secolo XIX will be even stronger, reaffirming its leadership in the Italian daily newspaper sector. With this deal the Group has hastened the necessary process of consolidation in the Italian publishing sector. Today’s agreement was made possible by the commitment and vision shown by the shareholders of Espresso and ITEDI and by the work carried out in these difficult years by all of Gruppo Espresso, which has obtained good results and has thus been able to take an active role in a business combination that is very important for its own future”.

Rodolfo De Benedetti
, Chairman of CIR, said: “The deal shows the long-term commitment of Cir, its management, my family and myself in the development of Gruppo Espresso. On the completion of today’s agreement Cir will remain the controlling shareholder of a larger and stronger group, with significant profitability that will be ever more authoritative in terms of governance, content and the titles that it owns. All this has been made possible thanks to the solid results obtained in these years by Gruppo Espresso, which today has sufficient credibility to play an active part in the consolidation of the sector. Cir has agreed not to have an absolute majority of the capital in favour of a deal that enables Gruppo Espresso to grow and create value in the interest of all its shareholders. We are very pleased with the agreement with prestige shareholders who know the sector: with them we are beginning a long process in which we will be sharing new ideas and new projects to meet the challenges of the sector. Despite the structural difficulties of publishing, especially in Italy, I have confidence in the prospects for the Group”.

The new company will be created on the outcome of the negotiations thanks to the merger by incorporation of ITEDI with Gruppo Editoriale L’Espresso, which in 2015 reported total revenues of approximately € 750 million.

The merger will take place through an exchange of shares that will be established precisely in the final agreements, subject to due diligence and other conditions. On the outcome of the deal, CIR will continue to be the controlling shareholder with an interest of approximately 43% in Gruppo Editoriale L’Espresso.

CIR also announces its intention of reaching an agreement with EXOR – which will hold an interest of approximately 5% in the company resulting from the merger, after the distribution of the shareholding by FCA – on the subject of their respective shareholding interests. The company resulting from the merger will continue to be listed on Borsa Italiana.

Completion of the merger, which is subject to authorization by the competent authorities as well as by the shareholder meetings of Gruppo Editoriale L’Espresso and ITEDI, is expected to take place in the first quarter of 2017.

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