Merger creates biggest media group

Shanghai's two leading press groups merged yesterday, creating the country's biggest newspaper company, in a bid to press ahead with reforms and develop multimedia platforms to drive growth.

The merger between the Jiefang Daily Group and Wenhui-Xinmin United Press Group will create a consolidated group with total assets of 20.87 billion yuan (US$3.42 billion) and net assets of 7.626 billion yuan.

The newly established Shanghai United Media Group will oversee the publishing of Jiefang Daily, Wenhui Daily and Xinmin Evening News, three major Chinese-language newspapers in the city.

Each of the three will maintain its independent news reporting and business operations, and will be encouraged to explore new business models.

The new group will also publish Shanghai Daily and a raft of metropolitan newspapers, including Shanghai Morning Post, Oriental Morning Post, Shanghai Evening Post and periodicals such as The Bund and Xinmin Weekly.

“The consolidation of the two groups is in response to the trend of media transformation,” said Qiu Xin, publisher of the new group, during the inauguration ceremony.

“The merger is an initiative to promote Shanghai media's influence and centralize resources to expand in the new media sector,” Qiu added.

After the merger, the group will focus on developing new media businesses and consolidating resources to support its newspapers with growth potential.

“It's a major restructuring for the country's two media groups, and it clearly aims to create a strong player in the field,” said Zhang Zhi'an, vice director of the School of Communications and Design at Guangzhou-based Sun Yat-sen University.

“The newspaper market is rather saturated in Shanghai, and overlapping businesses within the same groups create pressure on profitability,” he added. “Publishers need to join hands to fend off strong rivals in the new media sector. All of this needs new arrangement under unified headquarters.”

Shanghai Party Secretary Han Zheng has been urging the city's newspaper publishers to pay particular attention to new media trends and to accelerate their efforts to capitalize on them during inspection tours to the city's major media outlets.