Private equity firm KKR and German billionaire Mathias Döpfner have agreed to split up media conglomerate Axel Springer — separating its news operation from its lucrative classifieds business.
Axel Springer’s media assets including Business Insider, Politico, Die Welt and Bild will remain within Axel Springer as a privately-owned business owned by Döpfner and Friede Springer.
Four classified advertising websites will be spun off as separate joint ventures in which KKR and Canada Pension Plan Investment Board will be majority shareholders. Axel Springer’s stake in these companies will be about 15%, Döpfner said in a message to employees.
A statement on the deal did not give a valuation for the entire company.
Sources told Reuters the sides currently value the whole company at €13.5 billion, with the classifieds business accounting for around €10 billion.
That would be around double the value given for the group when KKR became a strategic investor five years ago, before Axel Springer delisted in 2020.
Axel Springer said: “The planned new structure foresees that Axel Springer’s media businesses – BILD, Business Insider, POLITICO, WELT, idealo, Bonial, Morning Brew, Dyn Media, EMARKETER, and the joint venture Ringier Axel Springer Poland – will remain within Axel Springer.
“Friede Springer and Mathias Döpfner will together hold close to 98 percent of the company. Axel Sven Springer, one of the grandchildren of the company founder, will retain the remaining shares – a smaller portion of his previous minority shareholding.
“This makes Axel Springer a fully privately owned and operated media company for the first time since the company’s IPO back in 1985.
“The Stepstone Group, AVIV Group, finanzen.net, and Awin, pending approvals, will be held as separate joint venture companies with KKR and CPP Investments as majority shareholders, Axel Springer as minority co-shareholder, and with an economic participation by the grandchildren of Axel Springer.
“The exact participation of the respective shareholders is to be finalized in the process of getting to binding agreements.
“This decision marks a new era for Axel Springer, with all businesses set to pursue their respective growth paths that align with their core strengths and market opportunities.”
Friede Springer, Vice Chairwoman of the Supervisory Board of Axel Springer, said: “For the past decades, we have enjoyed remarkable achievements with Axel Springer.
“Throughout, we never lost what truly defines us: being a journalistic institution with clear values. So, it was Mathias Döpfner’s and my vision that one day, Axel Springer would again be a privately owned and operated company. The realization of this vision now fills me with great joy.”
Henry Kravis, Co-Founder and Co-Executive Chairman at KKR, said: “Our partnership with Friede and Mathias has been exceptional and reflects the great admiration KKR has for visionary entrepreneurs and family-led businesses like Axel Springer.
“After a long and productive partnership, this natural next step for the Axel Springer group is a great outcome for all stakeholders involved.”
Axel Springer CEO Mathias Döpfner said: “Before we began our partnership with KKR five years ago, Friede Springer and I had an idea of how the company could ideally look like down the road. That vision is now close to becoming reality.
“This would not be possible without the dedication of our employees, who give their all for Axel Springer. But it’s also clear: Without the excellent and consistently reliable partnership with KKR, this outcome would have never been possible. In the new structure, we will have the very best requisites for a great future for journalism.”
Philipp Freise, Partner and Co-Head of European Private Equity, KKR: “We are proud to have partnered with Friede and Mathias since 2019 in pursuit of Axel Springer’s vision to become a leading global provider of digital content and classifieds.
“We have jointly reached this goal by acquiring industry leaders such as POLITICO to expand across geographies and segments, transforming the group’s operations, and attracting market leading talent.
“We are excited to continue the partnership as we further grow the classifieds businesses, working with the talented teams at Stepstone, AVIV, finanzen.net and Awin in our shared pursuit of future value creation.”