Axel Springer is tapping into the fast-growing Turkish market with a deal to acquire a stake in the country's largest media group, Dogan Yayin. Axel is buying a stake of around 9% in Dogan for EUR47m (USD60.5m). The deal builds on an existing relationship, which sees the German firm control a 25% stake in Dogan's TV unit.
Dogan owns majority stakes in major dailies Hurriyet and Milliyet and is a shareholder in magazine publisher Dogan-Burda Posta. It also owns broadcaster Dogan TV in Turkey. In the nine months to September, the group reports revenue of YTL9.7m (USD6.2m), up from YTL7.5m (USD4.8m) in the same period last year. However, operating profit was down to YTL344,905 (USD220,016) year on year from YTL559,612 (USD356.8). Axel is one of the largest publishers in Germany, where it owns popular tabloid Bild. The firm is trying to diversify into high-growth markets abroad after an attempt to buy into German satellite broadcaster ProSiebenSat1 was blocked by antitrust authorities in 2006.
"Dogan is not only in an excellent position within an attractive growth market, but also has a portfolio that matches well to the print and digital media range of Axel Springer," says Axel's chairman Mathias Dopfner.
Axel will sell one fifth of its stake in Dogan TV to the Turkish group for EUR77m (USD99m). This price is based on the valuation of Dogan TV when Axel bought its stake in the firm in 2006. Dogan will pay EUR47m (USD60.4m) when the deal closes and the remaining EUR30m (USD38.6m) with interests by March 2012. Axel has nominated Helmut Thoma, a former director of German broadcaster RTL, to the Dogan board of director.
Axels says the exact size of its stake in Dogan could be between 9.1% and 9.7%, depending on the amount of a capital increase at the Turkish group. The German firm will not take part in the capital increase.
StrategyEye's related companies: Axel Springer AG, Dogan Yayin Holding
