Schibsted Sverige and MittMedia have agreed to sign a letter of intent for future cooperation in Sweden by forming a new media group for subscription newspapers. The new media group will consist of Svenska Dagbladet and Mittmedia's 18 local subscription newspapers in Northern Sweden, as well as a majority share of MittMedia's subsidiary Promedia, which owns ten local subscription newspapers in Mid Sweden.
The new media group would in 2014 have had pro forma revenues of around SEK 3,300 million and an EBITDA of around SEK 150 million. Based on relative valuations Schibsted will have an ownership share of 30 percent in the new media group. The parties have agreed that the new media group should start off with a healthy balance sheet.
"Our intention is to build a new, strong alliance in the Swedish media market whereby the newspapers involved can strengthen their position. Cooperation like this should enable us to offer better advertising solutions, drive technology and digital development, and create even better conditions for the quality journalism that distinguishes Svenske Dagbladet," says Raoul Grünthal, CEO of Schibsted Sverige.
MittMedia's board chair Lars Leijonborg sees advantages in combining the companies into one group:
"Greater cooperation in the newspaper industry is imperative. We must become even stronger online, and that requires resources. Schibsted is an ideal partner for us, given its leading position in the digital transformation. If the transaction comes off, it will offer exciting opportunities for cooperation between our newspapers, with strong local and opinion journalism, and Svenske Dagbladet, with its recognized national and international quality journalism," says Lars Leijonborg.
