The new company, to be called Informa Group, will control conferences and specialist business publications in market niches including the maritime, telecoms, commodities and financial sectors.
Shares in both LLP and IBC soared yesterday as the market welcomed the prospect of cuts in overhead costs and cross-selling to each other's customers. IBC jumped 20 per cent to 437.5p, while LLP shares rose 17 per cent to 272.5p.
The merger relieves some of the pressure on LLP, which joined the market earlier this year at a price of 350p and has seen its value slide steadily.
Stuart Gilbertson, LLP chief executive, said the two businesses were highly complementary. "The events provide a showcase for the publications and the publications are an ideal selling opportunity for the events," he said. His IBC opposite number, Peter Rigby, said he was "extremely excited at the prospect of merging similar businesses".
Following the merger, Mr Rigby will become executive chairman with responsibility for group strategy and communications with shareholders. Mr Gilbertson will be chief executive in charge of the day-to-day running of the business.
The two companies said they would cut costs by merging their head offices and combining regional operations in areas where there is an overlap. However, they did not put a figure on savings, preferring to wait for more detailed work. On 1997 figures, Informa would have operating profits of about pounds 27m on revenues of pounds 188m.
Mr Gilbertson stressed that the merger was about growing revenues rather than cutting costs. He said the companies had no plans to close any existing publications.
He added that the combined company would also be able to invest more heavily in electronic publishing. The groups only make about 15 per cent of profits by publishing on the Internet or CD-ROM, but this is expected to grow rapidly.
IBC shareholders will receive about 57 per cent of the enlarged company's share capital, and LLP shareholders the balance of 43 per cent.Reuse content