'Merger of Informa and UBM is likely to mean job losses'

The potential merger of B2B media groups Informa and United Business Media will inevitably lead to job losses, but it is unlikely that more than a handful of journalists’ jobs will be axed, analysts have predicted.

UBM confirmed this week that it had approached its rival with a merger proposal and was in early-stage talks.

If the deal goes ahead, the combined group would have a stock market valuation of more than £3bn, making it one of the UK’s 100 biggest public companies.

Alex de Groote, a media analyst at stockbroker Panmure Gordon, said there was no doubt that a merged company would look to axe jobs. ‘It nearly always boils down to cost savings – put two companies together and take some costs out,’he said. ‘It always happens. It’s very sad, but that’s the way it is.”

UBM’s business activities include PR Newswire and CMP Medica, which publishes B2B health titles including Pulse and The Practitioner.

Its main publishing arm, CMP Information, is home to titles including Music Week, The Publican and Building.

Informa’s publications include maritime title Lloyd’s List, insurance journal The Review and Television Business Journal.

‘There will be some overlap,’de Groote added. ‘They will have a target in mind. That will entail some headcount reduction. There will be editorial going, but it will additionally be back office and distribution.”

Richard Menzies-Gow, an analyst at investment bank Dresdner Kleinwort, said the merged group stood to save between £40m and £50m in duplicated costs.

‘There may be the odd niche where they both have interests. I’m sure there might be. There’s not an immediately obvious overlap,’he said.

Both analysts said there was a good chance that the merger would go ahead, although there is a possibility that a third party will come forward with a bid for Informa, the bigger of the two groups with a stock market value of £1.65bn.

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