Monthly M&A Insider - Mergermarket

Germany
Consolidating the German newspaper industry
• Germany’s newspaper industry is highly fragmented and
has always been a likely area for consolidations. The most
controversial consolidation in the German newspaper
market was the acquisition of BV Deutsche Zeitungsholding
by Mecom in 2007.
• In the last few years however, the inability of newspapers
to become profitable online and declining circulation has led
to lower advertising, copy sales, and subscription revenue.
Particularly the decline in advertising revenue has been
exacerbated by the current economic downturn. This,
coupled with the high and inflexible fixed costs newspaper
publishing incurs, has proved a strong incentive for
consolidations, as the industry looks to achieve economies
of scope and scale.
• As one would expect in an industry sensitive to swings in
the economy, the German newspaper industry has shown
increased activity over the past month, with Mecom
selling it’s German operations, including “Berliner Kurier”,
“Berliner Zeitung”, “TIP Verlag GmbH”, and “Hamburger
Morgenpost”, to the German publisher M. DuMont
Schauberg (MDS) for €152m, making MDS Germany’s third
largest newspaper publisher. MDS subsequently
sold a 35% stake of this on to Heinen Verlag, another
German publisher.
• Verlagsgruppe Georg von Holtzbrinck sold the
Verlagsgruppe Handelsblatt (VHB), including
“Handelsblatt”, “Wirtschaftswoche” and “Tagesspiegel”,
and a 50% stake in “Die Zeit” to Dieter von Holtzbrinck
Medien GmbH. Additionally, Stefan von Holtzbrinck,
chairman of the Verlagsgruppe Georg von Holtzbrinck
Verlag is interested in making acquisitions among regional
newspapers and said the company will keep its eyes open.
• Is this trend set to continue? Axel Springer, the listed
German publisher, certainly thinks so. The publisher would
also be interested in buying German regional newspapers
according to chief executive Matthias Doepfner, citing the
global financial crisis as providing good opportunities for
acquisitions in both print and online media.
• Another possible deal looming in the near future could be
the acquisition of Schleswig-Holsteinischer Zeitungsverlag
(SHZ). According to the Financial Times Deutschland, SHZ
is seeking a buyer for itself, in a deal expected to be worth
€ 400m with the rival German publisher Madsack thought
to be a likely buyer.
• Furthermore, smaller family-owned newspaper groups
might come on to the market as they lack successors and
funds for both the expansion into the digital arena and to
survive the economic downturn.
Novartis: Alcon commitment prioritised over
move for Bayer, insider says
• Novartis does not envisage “mega-deals” such as the
acquisition of Bayer, said a Novartis insider. The insider said
Novartis is already well-diversified and also mentioned the
commitment of the Swiss listed pharma company to the
acquisition of Alcon, for which it still has to make another
payment of some $28bn.
• This month, Novartis was rumoured it may offer €42.55
per share for Bayer, the listed German chemicals/
pharmaceuticals company, although no company
spokesperson could confirm or deny the rumours.
• Sector analysts further believe that Novartis could be
planning a move for Austrian vaccines developer Intercell
in due course. The two firms are already involved in a
partnership and a takeover by Novartis was described as
an obvious move. When asked, an Intercell source did not
deny Novartis could be interested in such a move.
• Last month, a Novartis spokesperson had told this news
service that bolt-ons in the range of some CHF 100m
(€66m) are part of the Swiss pharma company’s strategy.
A large acquisition is unlikely to take place in the near
future, the spokesperson added at the time, with reference
to a statement by Novartis’ CEO Daniel Vasella.
Monthly M&A report – 111