RJR says merger will propel ‘going global’ strategy
Chairman of the RJR Group, J.A. Lester Spaulding, is touting international growth for the media company as a beneficial effect of the pending Gleaner/RJR merger, and in line with its 'going global' strategy.
More immediately, a more than $600-million cash infusion from the deal will finance the group's digital switchover project that Spaulding said was estimated to cost about $750 million.
RJR is already exploring over-the-top content (OTT) - a reference to content delivered via the Internet - through One Spot Media. Spaulding told the company's shareholders at their 67th annual general meeting on Tuesday that RJR is already garnering revenue through OTT content, which is free to Jamaicans but paid for by overseas subscribers, and that some of the Gleaner's assets and facilities represent a good opportunity to accelerate growth of the platform.
"One of the strong attractions of the transaction that we have entered into with The Gleaner Company Limited is that the Gleaner is not just a newspaper. The Gleaner has a marketing facility, an entree into wider markets where we would have to go and invest in, purchase or acquire from third parties, or start from scratch," Spaulding said.
RJR Group and Gleaner Company announced plans to merge their media operations in August. The tie-up, which will create a $3-billion media conglomerate, is subject to the approval of regulators, the court and the two companies' shareholders.
The merger will give RJR immediate access to publication and distribution arms in Canada, the United States and the United Kingdom, as well as online channels.
"The Gleaner Online services are the best and most expansive online media resources in and from Jamaica to the world. In this transaction, we now take control of that resource for growth and expansion globally," the RJR chairman said.
"The Gleaner also has a powerful archive of information about Jamaica since Emancipation in 1834. This archive is now at our fingertips for us to make and own powerful television features and documentaries about pre- and post-independent Jamaica. This will be a critical part of the content we will create and sell to the world in our content expansion drive," he said.
RJR is working with a five-year time frame to go completely digital. That project, Spaulding said, will require investment of $750 million for the switchover. The merger will immediately yield $655 million, which can "substantially fund the digital switchover project," he told shareholders.
Outlining the process that will precede the closing of the merger deal, Spaulding said the scheme requires the approval of the Broadcast Commission, and support from Financial Services Commission and the Jamaica Stock Exchange. Independent auditors will review the arrangement ahead of its submission to the Supreme Courts for approval. The scheme will then be put to shareholders for a vote at specially convened meetings, after which, assuming a positive response from shareholders, the court will give its final approval.
The parties expect the process to be wrapped up by yearend.