San Francisco — (press release) — Online computer information source CNET Networks Inc. said Wednesday it would buy Ziff-Davis Inc.'s online business ZDNet for $1.6 billion in stock, in a bid to create a leader in providing technology information and services.

Under the terms of the merger agreement, each share of trade publisher Ziff-Davis stock will be converted into 0.3397 share of CNET Networks stock and each share of ZDNet stock will be converted into 0.593 shares of CNET Networks common stock. CNET said in a statement it expects to issue about 50 million shares of common stock in the deal, valuing the merger at $1.6 billion. CNET had about 85.8 million shares outstanding.

As a result, holders of Ziff-Davis stock will hold about 35 percent of the combined equity. Softbank Corp., which owns a majority of the voting stock of Ziff-Davis, has agreed to vote its shares in favor of the deal.

Prior to the completion of the merger and as a condition to the deal, Ziff-Davis, as previously announced, will spin off its trade show and conference business and the publisher expects to pay a cash dividend of about $2.50 per Ziff-Davis share to its stockholders. The spinoff and cash dividend are expected to be completed in mid-August.

 
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