Umno will control the country's largest media conglomerate following the expected merger between the New Straits Times Press Bhd (NSTP) and Utusan Melayu.

According to news reports, the two public-listed organisations will be grouped under a yet-to-be named entity.

Quoting financial executives close to the proposed merger, Singapore's Straits Times yesterday said Prime Minister Abdullah Ahmad Badawi has given the green light.

The report said editorial operations of the two companies will remain distinct after the merger, which is expected to be announced soon.

"From an editorial standpoint, nothing changes. The deal is driven by commercial considerations like pushing for a greater slice of advertising revenue and cost savings on expenditure for new printing machines and staffing," the executives were quoted as saying.

On the same note, the daily highlighted the political dimension to the deal, with top English-language daily New Straits Times being placed directly under the control of Umno.

At present, the party controls about 50 percent equity interest in Utusan Melayu, which publishes Malay dailies Utusan Malaysia and Kosmo .

Umno took over Utusan after an acrimonious battle with the then Malay-language newspaper's editors and journalists in 1961.

But the party's control over NSTP has always been through nominee business groups such as Media Prima, which has a 43 percent stake in NSTP.

NSTP publishes the English dailies New Straits Times and Malay Mail as well as Malay newspapers Berita Harian and Harian Metro .

The merger may also pave the way for the ruling party to directly control all the private free-to-air TV stations - TV3, ntv7, 8TV and Channel 9 - which are currently under Media Prima.

Shares de-listed

Under the proposed merger, NSTP and Utusan Melayu shares will be de-listed and current shareholders of the two companies will be offered new shares in the merged entity.

According to the Straits Times , the shareholders of NSTP are expected to receive a cash payment under the merger, which will see Umno and Media Prima jointly controlling roughly 40 percent of the new entity.

Following the merger, the report said, the Malay-language publications of both companies will have a complete monopoly with a combined circulation of 800,000 copies.

The deal could also put these two Umno-linked companies on a stronger financial footing and pose a stiffer challenge to the currently top-selling English daily, the Star .

The Star is controlled by Umno's Barisan Nasional ally, MCA.

Meanwhile, business publication The Edge reported that proposals for the merger was first initiated six months ago.

Media Prima chief executive officer Abdul Rahman Ahmad declined to deny or confirm the speculation.

"We can't comment at this juncture; we are always looking for ways to create shareholder value in NSTP. There has been a lot of speculation. At this point, it is just a rumour," he told The Edge .