Axel Springer and KKR in talks to split media empire

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German billionaire Mathias Döpfner and private equity group KKR are in talks to split media conglomerate Axel Springer, in a deal that would separate the group’s media assets from its digital advertising operations.

Under the split deal being discussed, Axel Springer CEO Döpfner and Friede Springer, the widow of the company’s founder, would take greater control of the group’s media assets, according to four people with knowledge of the matter.

Among them are US news sites like Politico and Business Insider, and German publications like Bild and Die Welt.

KKR and the Canada Pension Plan Investment Board, which together hold the largest stake in Axel Springer, will take control of the company’s portfolio of classifieds sites, including jobs platform StepStone and real estate advertising unit Aviv, the people added.

The split could come as Döpfner ramps up efforts to build influence in U.S. media. In 2021, Axel Springer acquired Politico for $1 billion in its largest-ever acquisition.

The company also unsuccessfully attempted to buy the Financial Times in 2015.

Axel Springer’s classifieds business is growing faster and is more profitable than its media business, the two people said.

Taking control of the unit could pave the way for KKR to begin divesting its investments five years after partnering with Döpfner to take Axel Springer private, they added.

However, residents warned that there was no guarantee a deal would be reached.

Since the classifieds business is likely to be worth more than the news publications, Döpfner’s faction could also receive cash or a minority stake in the KKR-controlled business, some of the people said, but those details have yet to be worked out, they added.

A deal could also pave the way for Döpfner to pursue further acquisitions. People familiar with the billionaire former music journalist’s thinking say he has expressed interest in buying the Wall Street Journal, now owned by Rupert Murdoch’s News Corp, if it were put up for sale.

Axel Springer spokesman Adib Sisani said the company does not comment on “market rumours.” He added that “all shareholders are very satisfied with Axel Springer’s progress since its delisting in 2019.”

“We do not comment on market speculation,” KKR said, adding that it “believes in the continued success and growth” of Axel Springer.

KKR agreed to pay nearly €3 billion — at a premium of nearly 40 percent — in 2019 to take a large minority stake in a partnership with Döpfner and delist Axel Springer. The firm later sold some of its stake to CPPIB, which now holds a 12.9 percent stake in the company.

KKR and CPPIB, which together own 48.5 percent of Axel Springer, cannot make decisions without Döpfner because of his special management rights. Döpfner holds about 22 percent of the equity but has voting rights equivalent to twice that amount.

Over the past year, Axel Springer has cut jobs at its German media operations and closed a series of regional offices, even as it has paid dividends over 750 million euros in the past four years.

Axel Springer has planned an initial public offering for its employment platform StepStone, hope to ensure with a valuation of up to 7 billion euros for the unit. But that has not materialized amid a significant slowdown in listings in Europe.

The deal talks come as Axel Springer is embroiled in a dispute with hedge fund boss Bill Ackman. In January, Ackman threaten legal action against the company and Business Insider in a bitter battle over plagiarism allegations against the billionaire’s wife.

ONE Axel Springer internal review found that Business Insider’s reporting on plagiarism allegations against academic Neri Oxman was accurate and “well documented.”