Media Takeover? Sources: Springer, ProSieben in Merger Talks

Publishing group Axel Springer and broadcaster ProSiebenSat.1 are in talks to merge operations, creating a new media group worth more than $16 billion, people familiar with the matter told Handelsblatt.
Combining two popular media outlets: newspaper Bild and ProSieben's TV show Germany's Next Top Model.

Axel Springer, publisher of Europe’s largest tabloid Bild and German broadcaster ProSiebenSat.1 are in the early stages of mergers talks, people familiar with the companies told Handelsblatt.

It is the second time Axel Springer has tried to take over the broadcaster which airs the wildly popular Germany’s Next Top Model. Anti-trust authorities blocked a potential merger in 2006, but the publishing house hopes that this new deal, which would create one of Europe’s largest media groups, will get past the regulators. The new group would have combined sales of €5.9 billion and a joint market capitalization of €14.7 billion, or $16.1 billion, based on share prices on Tuesday morning.

If successful, the new group would shake up the German media landscape, which is dominated by family-controlled Bertelsmann, Germany’s largest media group which controls broadcaster RTL and publisher Random House and has sales of €16.6 billion.

The renewed push for a merger aims to consolidate Axel Springer’s and ProSiebenSat.1’s digital media operations, Reuters reported on Monday, citing two people familiar with the matter.

Two German anti trust regulators blocked a potential merger between Alex Springer and ProSiebenSat 1 in 2006 but a court later ruled that one of those authorities had made an incorrect decision.

German consumers view and read an increasing share of videos and text on their smart phones or computer. Online TV channel Netflix offers its movies and series on the German market, as does Amazon with its video streaming service.

 

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ProSiebenSat.1, which operates 6 TV channels in Germany, declined to comment on the possible merger, which was first reported in the Wall Street Journal.

Axel Springer, a family-controlled, Frankfurt-listed firm which is changing its legal ownership structure, declined to comment directly on the merger talks.

An Axel Springer spokeswoman did deny that Friede Springer, the 72-year-old widow of company founder Axel Cäsar Springer, might be giving up on controlling the publishing group.

Shares of Axel Springer jumped most strongly on the Frankfurt Stock Exchange, rising 6 percent to €50.13 by 08:45 GMT. ProSiebenSat.1 rose as much as 7 percent to €47.49 Tuesday morning but later gave up most of it gains and traded about 1 percent higher at €44.70.

Whether a new merger attempt would be successful this time remains to be seen.

“Anti-trust authorities examine mergers in the media world very closely,” said Heino Ruland, analyst at Ruland Research based in Eppstein, a town west of Frankfurt.

 

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Kai-Hinrich Renner is Handelsblatt's media reporter. Martin Dowideit is covering media for Handelsblatt Online and is also head of the companies and markets section. Florian Kolf leads a team of reporters who cover the trading and consumer sector for Handelsblatt. Daniel Klager is an editor at Handelsblatt Online. Gilbert Kreijger, an editor with Handelsblatt Global Edition, contributed to this article. To contact the authors: [email protected][email protected][email protected] and [email protected]