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Bailey: "a fantastic deal"

On the same day that a gaggle of anti-globalisation protesters were beating a weary and bloodied retreat from Genoa, AOL Time Warner was making the world a little smaller still by concluding its billion pound deal for IPC Media.

Following a lengthy negotiation period, at several points during which it seemed as though the deal would fall apart on the issue of price, last Wednesday's agreement saw the two parties agreeing the biggest trans-Atlantic publishing deal to date, with the final purchase price set at £1.15bn. It will see AOL Time Warner, itself the product of last year's mega-merger between AOL and Time Warner, integrating IPC's assets into its Time Inc magazine division.

Sly Bailey, the IPC chief executive since December 1999 and key to the Cinven management team that worked through the £860m buy-out from Reed Elsevier in 1998, has been the chief architect of building a media business that has outperformed the market and made money for Cinven in a buyers' environment.

She has been keen to explain the deal provides the best of both worlds - and she quickly points out she and her senior management team will be staying put, reporting to Michael Pepe, chief executive of Time International.

"It's a fantastic deal," she says. "People always knew there would be an exit for Cinven, and for IPC Media to be bought by the world's largest media group is ideal."

While the deal is still subject to regulatory clearance from the European Union, observers expect the green light, particularly as AOL Time Warner has only a minimal presence in Europe. Beyond the AOL ISP brand and Warner's music interests, the only media properties it owns in the UK are the localised version of Time magazine, the Wallpaper group and struggling women's glossy InStyle.

Internally, IPC staff profess to be pleased with the deal. It ends the uncertainty that hovered while Cinven remained the owner and an exit strategy was always on the cards.

"We're breathing a sigh of relief that the deal has finally gone through," said one senior IPC staffer. "The last couple of years have been something of a rollercoaster, but, despite that, we feel that we've got a structure in place here that will allow us to move forward confidently."

Industry observers believe the deal makes sense as part of the broader market-pleasing objectives of the US giant. But what are the benefits for IPC Media beyond a smiling separation from Cinven? While the VC walks away with a significant return on its initial investment - especially in a climate which is seeing magazine companies suffer and in which Emap took a major bath on its US expansion plans - IPC is left with some interesting questions.

How, for instance, will the Time and IPC portfolios be merged? Which corporate brand will predominate in the UK market? How will Time use IPC to further its stated intent of driving up overseas revenues and to develop its intended bridge-head into Europe? What can AOL offer IPC by way of furthering its brand-focused, media-neutral strategy? What will happen to IPC's pole position as potential purchaser of teen and TV consumer specialist Attic Futura? And what UK brands can be imported into the US market?

In the aftermath of the deal, there is still a major cloud obscuring the answers to these and other questions. And while the City applauds the bravura of the deal, it quietly voices misgivings. One analyst commented: "This is a bold move. However, there are still reservations over just how valuable it is to have a loosely aligned collection of media companies under one roof. Just where the value lies remains to be seen and we've yet to see any real benefits from the original Time Warner/AOL deal."

But while the dust obscuring the deal will take some time to settle, one obvious cross-promotional synergy will be with web brands. When your dad is AOL, the world's largest ISP, you have to be pleased for your web brands, especially if some have struggled for purchase in a flat online market.

In three main markets - music, women, and tv listings - Unmissable TV has performed well, but women's portal BeMe has found it difficult building loyalty in a crowded market. Especially when one of the biggest players in the market is
I-circle, Freeserve's women's channel. But NME.com, in particular, will benefit from closer links to AOL and its steady stream of content from sibling record companies. Neil Perkin, digital advertisement director at IPC Electric, said: "We're all excited about the deal. Within a few months we'll know more about how it's going to affect the business as a whole."

Media neutrality has been the oft quoted cornerstone of IPC Media which rose from the ashes of IPC Publishing. And seemingly the AOL Time Warner portfolio will allow brand development across TV, into new media and beyond, without the infrastructure expense for IPC. And while Emap failed to buy its way into the States, Bailey now has an unlocked door through which to take key brands within her 100-strong portfolio.

While the Americans will be keen to survey their new investment in detail, Bailey is clear that a common mindset exists that will make strategising in coming weeks much less painful.

"It's not just the biggest buying the biggest, but the best buying the best," she says. "We are an outstanding cultural mix and Time complements what we do fabulously because it has editorial innovation at its heart."

Over the last couple of years, Bailey and her team have earned a reputation for showing rather than telling. And the next couple will give them the ample opportunity to prove themuchmooted deal can be more than a marriage of convenience.