Dow Jones and Company and News Corporation Agree to Merge

Aug 03, 2007


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Dow Jones and Company and News Corporation have announced that they have signed a definitive merger agreement under which News Corporation will acquire Dow Jones in a transaction valued at approximately $5.6 billion. Under the terms of the agreement, which was approved by both companies' boards of directors, Dow Jones stockholders will be entitled to receive $60 in cash for each share of common stock and Class B common stock that they own. Certain members of the Bancroft family and the trustees of trusts for their benefit who collectively own approximately 37% of Dow Jones' voting stock have agreed to vote to approve the transaction. In addition, the parties have agreed on the terms of an editorial agreement that provides for the establishment of a five-member, special committee with the objective of assuring the continued journalistic and editorial integrity and independence of Dow Jones' publications and services. The initial members of the special committee will be Louis Boccardi, Thomas Bray, Jennifer Dunn, Jack Fuller and Nicholas Negroponte. The merger agreement provides that up to 250 holders of record and not more than 10% of the shares of Dow Jones may elect to have their shares of Dow Jones equity converted into a number of Class B units of Newco LLC, a newly formed subsidiary of News Corporation. The number of Class B units of Newco LLC is usable in exchange for each share of Dow Jones common stock will be based on the exchange ratio in the merger agreement, which is equal to the number of shares of News Corporation's Class A common stock with a value of $60 based on the volume weighted average trading price of a share of Class A common stock of News Corporation over the five trading days ending on the trading day prior to the closing of the merger.

The transaction is expected to be tax-free to Dow Jones stockholders to the extent they receive Newco LLC Class B units for their Dow Jones shares. The parties have also agreed that, upon closing of the merger, News Corporation will appoint a member of the Bancroft family or another mutually acceptable person to the News Corporation board of directors. The merger, which is expected to close in the fourth calendar quarter, is subject to approval by Dow Jones stockholders, execution and delivery by the parties of the editorial agreement, regulatory approvals and other customary closing conditions.

(www.dowjones.com; www.sec.gov; www.newscorp.com)