Axel Springer is Splitting Up, KKR Takes Over Advertising Business
Axel Springer Reorganizes
German media and publishing giant Axel Springer SE is undergoing a major reorganization. The company has announced that it will spin off its classifieds and marketing businesses into a separate company, which will then be acquired by private equity firm KKR & Co. The new company will be called Scout24 and will be headquartered in Berlin. The deal is expected to close in the first half of 2023.
Terms of the Deal
Under the terms of the deal, KKR will pay €6 billion for the classifieds and marketing businesses. Axel Springer will retain a 20% stake in Scout24. The deal values Scout24 at €10 billion, making it one of the largest private equity transactions in Germany in recent years.
KKR Focuses on Classifieds and Marketing
KKR has a strong track record in the classifieds and marketing sectors. The firm has invested in a number of successful classifieds businesses, including Scout24 in Germany, Auto Trader in the UK, and Trader Media Group in Australia. KKR also has experience in the marketing sector, having invested in companies such as Axel Springer Digital Ventures and Zalando.
Axel Springer to Focus on Publishing
The spin-off of the classifieds and marketing businesses will allow Axel Springer to focus on its core publishing business. The company will continue to publish newspapers, magazines, and online content, as well as operate its own digital advertising business. Axel Springer is one of the largest media companies in Europe, with operations in over 40 countries.
Reasons for the Reorganization
There are a number of reasons why Axel Springer is undergoing this reorganization. The company has been facing pressure from investors to improve its profitability. The spin-off of the classifieds and marketing businesses is expected to generate a significant amount of cash, which can be used to invest in new growth initiatives. The deal will also allow Axel Springer to focus on its core publishing business, which has been struggling in recent years.
Impact on the German Media Landscape
The reorganization of Axel Springer is likely to have a significant impact on the German media landscape. The company is one of the largest media companies in the country, and the spin-off of its classifieds and marketing businesses will create a new competitor in the market. The deal could also lead to consolidation in the German media sector, as other companies look to acquire assets from Axel Springer.
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