Source Pravda.Ru

Springer to buy ProSiebenSat.1 for $4.4B

German publisher Axel Springer is taking full control of broadcaster ProSiebenSat.1 Media in a 2.5 billion ($3.1 billion) deal to create Germany's second-biggest media group.

With the deal, Springer Chief Executive Mathias Doepfner fulfills a long-held dream of the company's late founder Axel Springer to marry the content and advertising power of its conservative daily newspaper Bild with television.

"ProSiebenSat.1 is an investment that will pay off," Doepfner said in a statement Friday.

"We are investing in a business that is profitable even in difficult times. We are creating a structure to open up the digital business of the future."

The deal will give Springer, whose domestic newspaper sales are sliding, greater access to the TV market - but will keep it tied to the advertising doldrums in Germany, Europe's least growing economy, and drag it deep into debt.

"I'm not a big fan," said one banker familiar with the deal. "The sad truth is that there is a proven track record of zero synergies between print and television."

"If you look to the U.S.A., what Time Warner and Viacom are doing is the opposite - breaking up conglomerates. But then, media deals are rarely rational. There is a historical link between Springer and ProSieben."

Staunchly conservative Springer's forays into TV were always seen with suspicion in Germany. Doepfner sharpened the political edge of Bild and his broadsheet Die Welt during his tenure, informs CNN.

Analysts were mixed on the deal.

Screen Digest analyst Guy Bisson said the deal made sense strategically, pointing to other media companies such as Rupert Murdoch's News Corp. that have TV and publishing units.

But HypoVereinsBank AG said in a research note that Axel Springer's price was too high given that it wasn't yet clear how it would merge ProSieben's TV properties with its own publishing efforts.

Saban's consortium acquired ProSieben in 2003 in a bankruptcy auction of assets that had belonged to Kirch Group. The consortium also includes Alpine Equity Partners, Bain Capital Investors, Hellman & Friedman, Providence Equity Partners, Putnam Investments, Quadrangle Group and Thomas H. Lee Partners.

Saban, who will stay on as chairman of the TV advisory board, called the agreement "the ideal solution for ProSiebenSat.1."

The deal is subject to regulatory approval by the German government and its media watchdogs, reports Business Week.

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