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German billionaire Matthias Döpfner and KKR are close to a deal to break up media giant Axel Springer, a move that would see one of the world’s largest private equity firms exit news media after a tumultuous five years.
The two sides are scheduled to meet on Thursday to discuss the proposed structure of a deal that would give KKR majority control of the company’s profitable advertising business, according to four people familiar with the matter.
The deal values ​​the company at 13.5 billion euros overall, with more than 10 billion euros of that for the advertising business, two of the people said. The deal has already been discussed several times at previous board meetings.
The Financial Times first reported in July that the couple were in talks to separate.
The deal gives Deppner, who has been CEO since 2002, greater control over the company’s media holdings, including U.S. news sites Politico and Business Insider and German tabloid Bild and its sister publication Die Welt.
Deppner is expected to retain minority stakes in the classifieds division, which includes recruitment platform StepStone and property advertising unit Aviv, as will Friede Springer, the company’s vice chair and widow of the company’s founder.
The breakup of Axel Springer marks a new chapter in a five-year partnership in which KKR took the bank private in 2019, valuing it at 6.7 billion euros. Together with Canada Pension Plan Investment Board (CPPIB), KKR owns a 48.5 percent stake in the Berlin-based firm.
KKR would strengthen its control over the advertising division and pave the way for the New York-based firm to exit its investment. It had previously wanted to conduct an initial public offering of StepStone at a valuation of 7 billion euros, but the plans have been repeatedly postponed due to the slow pace of European listings.
The split will free KKR and CPPIB from a series of controversies that have plagued Axel Springer’s news business, including sexual harassment allegations by a former editor at Bild and accusations of editorial interference by Döpfner.
More recently, KKR was embroiled in a fierce battle between hedge fund boss Bill Ackman and Business Insider after the publication of plagiarism allegations against Ackman’s wife.
The split comes as Depfner, 61, who served on the boards of Netflix and Warner Music Group and was a close friend of Elon Musk, is trying to expand its foothold in the English-language media market, particularly in the United States.
He tried but failed to buy the Financial Times in 2015, instead buying Business Insider later that year, and in 2021 he bought Politico for roughly $1 billion.
Axel Springer and KKR declined to comment.
