Germany: Axel Springer splits media, classified businesses

German media giant Axel Springer announced on Thursday that it would split its media and classified operations, with media coming under the wing of Friede Springer and CEO Mathias Döpfner, and classifieds going to US investment firm Kohlberg Kravis Roberts (KKR.)

"The new structure is intended to position all business areas optimally for future growth potential and success in their respective markets," the company said.

The transaction is expected to close in the second quarter of 2025 and it is subject to regulatory approval.

Axel Springer, Germany's most influential media group

The company was founded by German businessman Axel Springer in 1946 in the city of Hamburg. Since then, it has grown to be Germany's most influential media group.

Springer's widow, 82-year-old Friede Springer, consolidated control over the business after his death in 1985 and later gradually transferred power to her anointed successor Döpfner.

Currently, Axel Springer's right-wing tabloid Bild ranks as the country's most-read newspaper, with a daily circulation of just under one million by the end of 2023.

Recently, the group has sought to expand into North America with the $1 billion purchase of US digital newspaper Politico in 2021. 

Döpfner, who has been Axel Springer's CEO since 2002, is said to have a clear focus on the US, where Springer hopes to grow and become a major publisher.

Media to become a family owned

The company announced on Thursday that as it splits its media and classifieds operations, with almost 98% of the media businesses to be owned by Döpfner and Friede Springer.

It would make it a family-owned company for the first time since its IPO in 1985.

Döpfner said the "best possible conditions" had been created with the new structure for what he described as a good future for journalism.

KKR takes over classifieds

In a letter to employees, Döpfner said Axel Springer would become a minority shareholder in the classifieds business, which includes job portal Stepstone and property website Aviv.

But US private equity firm KKR and CPP Investments, a Canadian pension fund, are set to be the new majority owners of Axel Springer's classified arm.

In late 2019, Axel Springer and KKR entered into a strategic cooperation with the purpose of accelerating growth through investments. 

The move saw the departure in 2020 of Axel Springer from the stock market after trading there for some 35 years. 

Although the current value of the company is unknown, British newspaper Financial Times has reported it to be around €13.5 billion ($15 billion), with more than €10 billion attributed to its classified business. 

Under that estimate Axel Springer appears to have more than doubled its value under its five-year-old partnership with KKR.

jcg/rmt (dpa, Reuters)