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German media giant Bertelsmann, in contrast to U.S. industry giants, is betting on the future of print, or at least print-style content.
In a deal announced Monday, Bertelsmann has bought full control of the largest European magazine publisher, Gruner + Jahr, acquiring the final 25.1 percent of the company it did not already own. The deal brings the magazine group, which publishes original titles such as newsmagazine Stern and entertainment monthly Gala, as well as local-language version of U.S. titles, including the Dutch Vogue and Spanish Cosmopolitan, together with Bertelsmann’s broadcast business RTL Group. RTL is Europe’s largest television and radio company and controls X Factor producer FremantleMedia.
“The full acquisition of Gruner + Jahr is a strategic milestone in strengthening our core,” said Bertelsmann chairman and CEO Thomas Rabe. “Gruner + Jahr has been majority-owned by Bertelsmann for decades and is an important part of our content businesses.”
The all-cash deal, details of which were not disclosed by either party, stands in sharp contrast to the approach by U.S. media conglomerates, such as Time Warner, which has spun off its Time Inc. magazine business. Also, Rupert Murdoch previously separated his 21st Century Fox entertainment conglomerate from the News Corp publishing business.
Bertelsmann, however, is betting Gruner + Jahr’s print brands, and the content they produce, will pay dividends as the magazines expand over online and digital platforms. Rabe said Bertelsmann would provide “the necessary funds in future” to facilitate the transformation of Gruner + Jahr into a fully digital company.
As of June 30, 2014, Gruner + Jahr employed more than 8,500 people working on more than 500 publications and digital offerings in some 30 countries. Revenues for Gruner + Jahr last year were $2.6 billion (€2.1 billion) with an operating profit (EBITDA) of $242 million (€193 million).
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