The merger will cut costs for both the broadcaster and the publisher, setting up a single entertainment giant with exposure to network television, streaming and news delivery.

The Fairfax board will unanimously recommend shareholders vote in favour of the cash and scrip deal, under which they will receive 0.3627 Nine shares and 2.5 cents for each share.

This represents a 21.9 per cent premium to Fairfax’s closing share price of 77 cents on Wednesday, in aggregate terms.

If the transaction is approved and completed, Nine will emerge with a majority 51.1 per cent of the combined entity.

The new entity will be “Australia’s largest integrated media player” and include Nine’s free-to-air TV network, Fairfax’s masthead newspapers and radio interests, and Fairfax’s stake in online property classifieds giant Domain.

Netflix rival Stan, a streaming joint venture between the two companies that already exists, will be wholly owned by the new entity.

Overall, the merger’s expected to deliver at least $50 million in annual cost savings.

Nine chief executive Hugh Marks will lead the new company, while Fairfax directors will join a board helmed by Nine chairman and former Liberal federal treasurer Peter Costello.

“Both Nine and Fairfax have played an important role in shaping the Australian media landscape over many years,” Mr Costello said in a statement.

“The combination of our businesses and our people best positions us to deliver new opportunities and innovations for our shareholders, staff and all Australians in the years ahead.”

However, it appears some assets could be sold or reassessed following the merger.

“After completing the proposed transaction, Nine will review the scope and breadth of the combined business, to align with its strategic objectives and its digital future,” the companies said in their statement.

Pending the approval of Fairfax shareholders, the merger is expected to be completed by the end of 2018.

The new business will be called Nine, prompting anger from some within Fairfax.

So after 150-plus years this is all we get: “I would like to thank everyone for their contribution to Fairfax” https://t.co/GHjXMRTX2f

— Kate McClymont (@Kate_McClymont) July 25, 2018

This #Fairfax news is incredibly sad. As an SMH and AFR alumnus, watching the name disappear from our media landscape is like a death in the family. Vale Australian media diversity.

— Paul Syvret (@PSyvret) July 25, 2018

more to come

– with AAP