Seven West Media and Southern Cross Media Announce Merger: Kerry Stokes to Step Down
In a significant development for the Australian media landscape, Seven West Media (SWM) and Southern Cross Media Group (SCA) have announced a proposed merger. This deal would combine their assets across television, radio, digital, and publishing, creating a major player in the industry. As part of the agreement, media mogul Kerry Stokes will step down as chair of the merged entity in February 2026.
Merger Details and Ownership Structure
Under the terms of the merger, Southern Cross Media will hold a controlling stake of 50.1% in the combined group, while Seven West Media shareholders will own 49.9%. This will dilute the Stokes family's stake from approximately 40% to around 20%. The deal, valued at around $417 million, aims to generate $25-30 million in pre-tax cost synergies.
Leadership Transition and Key Personnel
Following the merger and Kerry Stokes' departure, Heith Mackay-Cruise, the current chair of Southern Cross Media, will assume the role of chairman. Jeff Howard, the chief executive of Seven West Media, will become the CEO of the merged group. John Kelly, the CEO of Southern Cross Media, will take on the role of managing director of audio.
Combined Assets and Strategic Rationale
The merger will bring together Seven West's free-to-air TV network (Channel Seven), 7Plus streaming service, and publishing assets like The West Australian with Southern Cross's radio networks (Triple M and Hit Network) and its LiSTNR digital audio platform. The companies believe that combining these assets will create a "truly national, diversified media organisation" capable of competing effectively in a rapidly changing media environment.
Industry Reaction and Potential Challenges
While the boards of both companies have expressed their support, the merger has drawn some skepticism. Sandon Capital, a major Southern Cross shareholder, has criticized the deal as "diworsification," arguing that it exposes Southern Cross to the challenges facing free-to-air television. The deal also comes at a time when Seven West has been facing declining TV advertising revenues and falling profits.
Shareholder Approval and Regulatory Hurdles
The merger is subject to regulatory and shareholder approval, with a vote expected in early 2026. Seven Group Holdings, which owns 40% of Seven West, has indicated it will vote in favor of the deal. Shares in both companies experienced a surge following the announcement, suggesting initial investor optimism.
Executive Commentary
Kerry Stokes stated, "Following the improved performance of Southern Cross Media under Heith Mackay‑Cruise, I have every confidence Heith will continue to guide the combined group successfully. After my retirement from the board, I intend to continue supporting the chair and board wherever I can add value."
Jeff Howard said, "This combination marks a pivotal moment for Australian media. By bringing together the complementary assets and brands of SWM and SCA, we are creating a truly national, diversified media organisation with extensive scale and reach across our free-to-air television, streaming, audio, digital and publishing assets."
Heith Mackay-Cruise added, "This merger will create one of Australia's leading total TV, Audio and Digital platforms, with the scale, reach and diversification to better serve Australian audiences and communities."
Future Outlook
The proposed merger represents a significant shift in the Australian media landscape, with the potential to create a more robust and diversified media entity. However, the success of the merger will depend on navigating regulatory hurdles, achieving the projected cost synergies, and successfully integrating the diverse assets and operations of Seven West Media and Southern Cross Media.
