NEW YORK — Meredith Corp. announced Sunday that it is buying Time Inc. for about $1.8 billion, a deal CEO Stephen Lacy called “a transformative and financially compelling growth opportunity” that joins two giant magazine companies.

Meredith brings with it a magazine portfolio that includes Better Homes & Gardens, Family Circle, allrecipes and Shape, while Time Inc. owns properties including Time, Sports Illustrated, People, Fortune and Entertainment Weekly.

The companies said the deal was unanimously approved by their boards of directors and will close early next year.

Meredith will pay $18.50 per share in cash for Time’s nearly 100 million outstanding shares. It said it is using $3.55 billion in financing commitments from a variety of lenders and a $650 million preferred equity from Koch Equity Development, an investment arm of Koch Industries, to finance the deal and pay down existing debt. Prior to the announcement, Meredith had just $28 million in cash on hand.

Combined, the companies posted $4.8 billion in revenue last year. Meredith expects it will save up to $500 million in costs in the first two years of operation.