WELLINGTON, May 11 (Reuters) - Media group APN News & Media Ltd...

WELLINGTON, May 11 (Reuters) - Media group APN News & Media Ltd (APN) on Wednesday announced plans to spin off its New Zealand business and merge it with the local business of Australia's Fairfax Media Ltd (FXJ).

APN News & Media Ltd said it initially plans to list its New Zealand business, NZME, on the New Zealand stock exchange, with a secondary listing on the Australian Securities Exchange.

At the same time, it announced it was in talks with Fairfax to explore a merger of their New Zealand businesses to create a leading media group across print, digital and radio.

APN said the demerger would reduce net debt "significantly" and leave the company with "limited exposure to the structurally challenged print sector."

"The demerger will allow APN to drive growth and investment across the two outperforming media sectors in Australia, radio and outdoor," APN CEO Ciaran Davis said in a statement.

"It presents a significant opportunity for APN to capitalise on our leading media brands and market positions, with radio and outdoor a strong natural fit for integrated advertising campaigns."

Fairfax New Zealand owns a series of newspapers and magazines including the Dominion Post. NZME also owns newspapers, including the New Zealand Herald, as well as radio stations. Both also operate several websites.

The company said it expects the demerger and listing in late June or early July, if approved by shareholders and regulatory bodies.

If the listing is approved by shareholders, eligible APN shareholders will receive one new share in NZME for each existing APN share they hold, while retaining their existing APN shareholding, the company said.

APN will continue to be listed on the ASX and NZX.