San Francisco-based CNET (cnet.com) will exchange 0.59 share for each of Ziff Davis's 85 million shares. Based on CNET's 4 p.m. stock price of $32.1875 Tuesday, the transaction is valued a $1.6 billion. The transaction, which will be accounted for through purchase accounting, is expected to close in the fourth quarter. CNET chief executive Shelby Bonnie will remain CEO of the combined entity, while Ziff-Davis CEO Dan Rosensweig will become president. CNET president Rich Marino will become chief operating officer of the combined company.

Softbank Corp of Japan, which owns more than 50 per cent of New York-based Ziff-Davis, will own a 17 per cent stake of he combined company and supports the transaction, the companies said. Through the acquisition, which is expected to be announced Wednesday, CNET will gain a significant presence in 25 markets spanning Europe, Asia, North America and Latin America, Mr Bonnie said.

Currently, CNET's international holdings include only eight Web properties in the Asia-Pacific region. "We look a technology as the only truly global language," Mr. Rosensweig said. The transaction is expected to add to earnings, from an Ebitda standpoint, or earnings before interest, taxes, depreciation and amortization. The new entity will have 1,600 employees and more than $500 million in revenue in 2001. Ziff-Davis recently completed a restructuring process that saw the spinning off of its events business, which includes Comdex, one of the world's largest technology fairs, NetWorld+Interop, and Seybold Seminars.

-- WSJ