Axel Springer, the owner of Politico, Business Insider and a portfolio of German newspapers, has struck a deal that will anoint its chief executive, Mathias Dopfner, as the undisputed magnate of a transcontinental media empire.
The deal announced Thursday will split Axel Springer into two separate organizations. Mr. Dopfner and Friede Springer, the widow of the company’s founder, will assume full control of the media properties. And Axel Springer’s biggest outside investors, the private equity firm KKR and CPP Investments, will take control of the company’s lucrative classified advertising business.
The move will cement Mr. Dopfner and Ms. Springer’s unilateral oversight of the company’s publishing business, giving them additional latitude to expand their media holdings.
The deal values all of Axel Springer at roughly $15 billion, with the company’s publishing assets worth about $4 billion, according to a person familiar with the negotiations who spoke on condition of anonymity to discuss confidential financial information.
“Before we began our partnership with KKR five years ago, Friede Springer and I had an idea of how the company could ideally look like down the road,” Mr. Dopfner said in a statement. “That vision is now close to becoming reality.”
Henry Kravis, the co-founder of KKR, said in a statement that the deal was a “natural next step” for Axel Springer and “a great outcome for all stakeholders involved.”
Mr. Dopfner, 61, a music critic-turned mogul, has long held ambitions to greatly expand Axel Springer’s footprint, transforming it from an influential German newspaper publisher to a sprawling global media conglomerate.
His profile has risen alongside the company’s, leading to interviews with tech titans like Elon Musk and Mark Zuckerberg and a seat on the board of Netflix. Along the way, he has struck deals to make Axel Springer a leading player in the United States, establishing an office in New York, buying Business Insider for $450 million in 2015 and Politico for $1 billion in 2021.
KKR took Axel Springer private four years ago in a deal that valued the company at roughly $7.5 billion. Mr. Dopfner and Ms. Springer kept their stock, but they remained minority shareholders in the company. The capital infusion from KKR gave Axel Springer a chance to expand without public market pressure, and the private equity firm saw potential in the publisher’s classified advertising business.
Though Axel Springer is best known in the United States for its media properties, its classified business is a major economic engine. Stepstone, an online jobs board, and Aviv, a digital real estate company similar to Zillow, have flourished under Axel Springer, generating cash that has helped grow the company.
As part of the deal with KKR, Mr. Dopfner and Ms. Springer will keep a minority stake in the classifieds business. The grandchildren of company founder Axel Springer will continue to benefit financially from the classifieds business; one of Mr. Springer’s grandchildren, Axel Sven Springer, will hold onto a small stake in the media business.
Splitting up the German media conglomerate would give KKR an off-ramp from the business of publishing that has occasionally put the private equity firm under a microscope. KKR was dragged into the spotlight by William Ackman, an investor and social media provocateur, after Business Insider published a series of stories asserting that his wife, the academic and designer Neri Oxman, had committed plagiarism.
Axel Springer has also been accused of permitting sexual harassment to fester at the company. In 2021, Mr. Dopfner acknowledged that the culture of Bild “was not up to our standards” after an investigation into sexual harassment at the publication.
Mr. Dopfner has also been accused of showing favoritism toward political parties to influence coverage. Mr. Dopfner apologized in 2023 for urging the editor of Bild, Axel Springer’s flagship newspaper, to provide favorable coverage to a political party.
In the United States, Mr. Dopfner has come under scrutiny for his private support of former President Donald J. Trump, asking colleagues in an email whether they should get together and “pray” for his election. When asked about the email by The Washington Post, Mr. Dopfner acknowledged that he might have sent it ironically.
Despite the controversies, Axel Springer’s publications in the United States have continued to break news on figures such as Mr. Trump, Elon Musk — an acquaintance of Mr. Dopfner’s — and the U.S. Supreme Court.
The post Axel Springer Strikes Deal With KKR to Split Up Publishing Giant appeared first on New York Times.