U.S. media giant Meredith is to buy Time Inc., publisher of the magazine of the same name, for $2.8 billion, backed by the billionaire Koch brothers known for supporting conservative causes, in an unlikely ending to a saga over the future of CNN's parent company.
Time, which also publishes its eponymous magazine, Fortune, and other brands as Sports Illustrated, People and Entertainment Weekly, began looking for a buyer late last year before giving up several months later, while welcoming options.
Meredith had expressed interest in buying Time earlier this year then walked away because it could not secure the necessary financing.
Time revealed in October an aggressive plan to boost revenue that included focusing less on magazine journalism and more on digital activities.
Time Inc was spun off from media and entertainment giant Time Warner, which was seeking to shed its journalism assets.
Meredith's offer is for $18.50 per Time share, up about 10 percent from the shares' closing price of $16.90 on Friday. Share prices rose over the past week on speculation over the purchase.
The boards of both companies have approved the transaction, which is due to be finalized in the first semester of 2018, Meredith said in a statement.
The all-cash transaction includes about $1.7 billion for the company assets plus more than $1 billion in debt.
It also said that 650 million dollars in financing for the deal was coming from Koch Equity Development (KED), owned by Charles and David Koch, but emphasized that the company would not have seats on Meredith's board or have any "influence on Meredith's editorial or managerial operations."
The Koch brothers are known for their support of causes and donations to the Republican Party, usually favoring ultra-conservative causes.
"We are creating a premier media company serving nearly 200 million American consumers across industry-leading digital, television, print, video, mobile and social platforms positioned for growth," said Meredith Corporation chairman and CEO Stephen Lacy.
Time Chairman John Fahey said the sale was in the best interests of the company and its shareholders, noting the price represented a 46 percent premium to the closing price of shares on Nov. 15, the day prior to media reports about the deal.
The transaction will create a company with a combined revenues of $4.8 billion for 2016, including $2.7 billion of total advertising revenues with nearly $700 million of digital advertising revenues.
Meredith also anticipates savings of $400 million to $500 million in the first full two years of operation thanks to synergies.
Meredith's portfolio includes 17 local television stations in 12 U.S. markets, as well as publications such as Better Homes & Gardens, Allrecipes, Parents and Shape.