Axel Springer agrees €13.5bn break-up deal with KKR

German publisher separates into two separate companies.

Axel Springer and private equity firm KKR have agreed to a €13.5bn (£11.5bn) deal that will see the German publisher split into two companies. The move comes as the media industry continues to grapple with the challenges of the digital age.

Under the terms of the deal, KKR will acquire a 49.9% stake in Axel Springer's digital portfolio, which includes classifieds, news, and marketing businesses. The remaining 50.1% stake will be held by Axel Springer. The transaction is expected to close in the first half of 2023.

The deal will create two separate companies:

• Axel Springer SE: This company will house the publisher's traditional print and digital news businesses, as well as its stake in the digital portfolio.
• Axel Springer Digital Ventures GmbH: This company will hold KKR's stake in the digital portfolio, as well as Axel Springer's remaining digital assets.

The deal is a major step in Axel Springer's transformation from a traditional publisher to a digital media company. The company has been investing heavily in digital over the past few years, and the deal with KKR will give it the resources to accelerate this transformation.

KKR has a strong track record of investing in the media sector. The firm has previously invested in companies such as ProSiebenSat.1 Media, RTL Group, and Bertelsmann. KKR's investment in Axel Springer is a sign of its confidence in the company's future.

The deal is also a reflection of the changing media landscape. The digital age has led to a decline in the print media industry, and publishers are increasingly looking to digital to drive growth.