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German billionaire Mathias Döpfner and private equity firm KKR have agreed a €13.5bn deal to break up Axel Springer, splitting the profitable classified advertising business from its media division.
Under the plan, Döpfner, Axel Springer’s chief executive and one of its largest shareholders, will cement control over the media business that owns German newspapers Bild and Die Welt as well as the US news sites Politico and Business Insider.
The media business, which KKR will exit, is valued at €3.5bn, according to people close to the deal. KKR and its partner the Canada Pension Plan Investment Board (CPPIB) will become the majority owners of the classifieds business, which is valued at €10bn, the people said.
The decision to split Axel Springer comes after US buyout firm KKR agreed to pay almost €3bn in 2019 for a large minority stake in the company and to partner with Döpfner.
After delisting the group from the German stock market, KKR sold some of its shares to CPPIB, which at present holds a 12.9 per cent stake.
The break-up plan, first reported by the Financial Times in July, was approved on Thursday by the company’s supervisory board.
In a note to staff following the announcement of the plan, Döpfner said that the deal represented the “logical next step” for both parts of the company.
He said he wanted Axel Springer’s media outlets to be “faster, more agile and less bureaucratic” and to “strengthen the role of technology as a critical success factor”.
The split would allow 61-year-old Döpfner to pursue his ambitions to expand in English-language media. Together with Friede Springer, widow of the company’s founder, Döpfner will own close to 98 per cent of the media business.
The classified division includes the jobs platform StepStone and real estate ads unit Aviv. Axel Springer had planned an initial public offering for jobs platform StepStone, hoping to secure as much as a €7bn valuation, but has been thwarted by a still tough listings market in Europe.
The Axel Springer media business will retain a minority stake in the classifieds businesses.