Bertelsmann Gains Control of RTL Group
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[London, ENGLAND] European media giant Bertelsmann AG announced Monday it has gained control of the TV, film and Internet production companies that comprise the RTL Group by acquiring another 30 percent of RTL's shares.
The cost? Almost literally an arm and a leg -- as Bertelsmann has parted with 25.1 percent of itself to make the acquisition in a transaction estimated to be worth EUR 4.2 billion ($3.95 billion).
Bertelsmann has purchased the RTL shares from Groupe Bruxelles Lambert S.A. (GBL) whose stock is majority-owned by private entrepreneurs Albert Frère and Paul Desmarais. In turn, GBL takes its quarter of Bertelsmann with an option of putting the stake on the stock market in three to four years' time.
If all this sounds like a complicated piece of horse-trading, it certainly is -- and made more so by Friday's preliminary step in which RTL Group purchased Bertelsmann's Broadband Group for EUR 12.8 million (US $11.9 million).
RTL Group's interests in TV, radio and film production are much more extensive than its Web activities, although its Web venture RTL World is becoming one of Europe's most visited portals. Its key sites are RTL.de, RTL.Dating.de, Formel-1.de, GZSZ.de and RTL-mail.de.
Ownership of the respective groups is now as follows. RTL Group is 67 percent owned by Bertelsmann, 22 percent by Pearson, with the remaining 11 percent free-floating. Bertelsmann AG is 57.6 percent owned by the Bertelsmann Foundation; 17.3 percent by the Mohn Family, and 25.1 percent by GBL.
Reinhard Mohn appears unconcerned that GBL now has a substantially greater share of Bertelsmann than does the Mohn Family, saying the two shared a mutually trusting cooperation.
"We have found a partner who will help us ensure that our work remains efficient, purposeful, up-to-date and results-oriented," said Mohn.
In something of an understatement, Paul Desmarais and Albert Frère said they were delighted to strengthen their "longstanding and cherished ties to the Bertelsmann group."
"This agreement represents a major step for GBL, and is a sign of our readiness to invest strategically for the long term. We are offering our shareholders the prospect of participating in the growth of one of the world's leading media groups," added Desmarais and Frère.
25.1 percent of Bertelsmann is certainly more valuable than 30 percent of RTL Group. Bertelsmann's far-flung empire employs 76,000 people in 58 countries, encompassing Internet retailers Bol.com and CDnow, BMG Music with artists such as Whitney Houston, magazine publisher Gruner + Jahr whose titles include Family Circle and Stern, while its ownership of Random House helps make it the largest English language book publisher in the world.
RTL Group was created by the merger of CLT-UFA and Pearson TV in April 2000. It has 22 television stations and 18 radio stations in 11 countries, and claims to be the leading sports rights marketer in Europe.