Axel Springer sells some publications to rival Funke for $1.22 bn

Axel Springer, Europe's biggest newspaper publisher, yesterday agreed to sell two regional newspapers and some magazines to rival Funke Mediengruppe, for €920 million ($1.22 million).

The Berlin-based publisher will sell its two regional newspapers Berliner Morgenpost and Hamburger Abendblatt, five TV programme guides and two women's magazines.

Privately-held Funke will pay €660 million in cash at closing or at the latest on 30 June 2014, and Axel Springer will lend the remaining €260 million to Funke with a term of several years.

The assets being sold generated earnings before interest, taxes, depreciation and amortisation last year of €94.8 million, and revenues of €512.4 million.

As part of the transaction the two publishers will also set up joint ventures for the distribution and marketing of print and digital media offerings.

Thomas Ziegler, managing director of Funke, said, ''We have to join forces – because the media market presents challenging tasks: Therefore, we are looking forward to work closely with Axel Springer AG in marketing and distribution within the framework of the joint ventures and we appreciate that selected print titles of Axel Springer will join our activities.''

Mathias Döpfner, CEO of Axel Springer, said, ''The decision to divest some of our brands with the longest tradition in our company was not easy. However, we are sure that the grouping under the Funke Mediengruppe, which aims at focusing on regional print- and online-journalism and on magazines, provides the best long-term perspective for the brands and for the staff.''

As print media declines, media groups are now focusing on online for growth. Both companies said that they wanted to focus even more stringent on their respective strategic goals in the future by following a stringent digitization strategy,

Axel Springer said that it will focus even more on its multimedial journalistic core brands WELT- and BILD-groups with the related magazine brands Auto Bild-group, Computer Bild-group and Sport Bild.

Founded in 1946, Axel Springer is Europe's largest multimedia print, online, and Web-TV company.

It has more than 230 newspapers and magazines, more than 80 online offerings as well as holdings in television and radio stations. It is active in over 36 countries and publishes newspapers and magazines in Switzerland, Spain, and France, Poland, Hungary, Russia, the Czech Republic and Romania.

Axel Springer has a joint venture in India with Livinf Media, the publisher of India Today , one of the biggest independent publishing houses on the subcontinent for marketing the Indian edition of car magazine Auto Bild.

Axel Springer founded the ITAS Media company and has its head office in New Delhi.

Founded in 1948 by Jakob Funke and Erich Brost, Funke Mediengruppe owns more than 30 newspapers, 170 special-interest and trade magazines, 100 advertising papers and 400 customer magazines.

The Funke family owns the company after they acquired the 50 per cent stake from the Brost family in 2012.