Bertelsmann taps new No. 1
Slashing debt to top Ostrowski agendaGerman media giant Bertelsmann has named Hartmut Ostrowski, head of its media services division Arvato, as the successor to chairman and CEO Gunter Thielen (HR 1/20).
Ostrowski, who beat Ewald Walgenbach of Bertelsmann's DirectGroup division for the top job, will take over from Thielen on Jan. 1. Thielen will be chairman of Bertelsmann's supervisory board, replacing longtime chairman Dieter Vogel, who is resigning. Arvato chief operating officer Rolf Buch will succeed Ostrowski as head of that division.
Taking over the reins at Bertelsmann, Ostrowski's main job will be to cut debt while squeezing greater growth and profit out of the group's largely independent business divisions.
Bertelsmann ? which controls Europe's No. 1 broadcaster, RTL Group, along with music label BMG and book publisher Random House ? spent much of 2006 dealing with internal problems.
The company piled on debt to finance its ?4.5 billion ($5.8 billion) buyback of the 25.1% stake in Bertelsmann held by Groupe Bruxelles Lambert. The deal more than doubled Bertelsmann's economic debt to ?8.9 billion ($11.4 billion).
Bertelsmann already has sold its BMG Music Publishing division to Vivendi for $2.1 billion to help trim debt, and further selloffs might be in store.
While the company is well-placed to take advantage of a rebound in advertising sales in Europe, the Internet remains a problem area for the company.