Passers-by walk in front of the main entrance of the Axel Springer high-rise building.
Carsten Kohl | Image Alliance | Getty Images
German media empire Axel Springer said on Thursday it would The split in two ensures the billionaire executive's control over the headlines of Bild and Politico.
Axel Springer's profitable classifieds business will become an independent entity majority-owned by U.S. company KKR and Canadian CPP Investments, the German media group said in a statement.
A source told Reuters on Saturday that an agreement had been reached this summer to separate Axel Springer.
The company's valuation was not given in the statement.
Sources told Reuters that the two parties currently value the entire company at 13.5 billion euros ($14.95 billion), with the classified advertising business accounting for the largest share at about 10 billion euros.
That would be about double the value KKR provided the group as a strategic investor five years ago in a deal before Springer delisted in 2020.
Axel Springer said a final agreement on the spin-off is expected to be reached in the coming months, with the deal expected to be completed in the second quarter of next year.
Axel Springer founded his eponymous publishing house in Hamburg in 1946, which grew to become Germany's most influential media group, with its right-wing red-flag tabloid Bild. Germany's most read newspaper by far, with a daily circulation of just under 1 million, it will reach 1 million by the end of 2023.
Now, the media company has set its sights on North American expansion, acquiring political news outlet Politico for $1 billion in 2021 and seeking to expand its presence in North America.
The deal to break up Springer would hand the group's media assets to Doepfner and members of the Springer family, including Axel's widow Friede Springer, 82, who consolidated control of the business after Axel's death in 1985 before gradually shifting power handed over to her designated successor Dopfner.
KKR and its partner CPP Investments currently own 35.6% and 12.9% of Axel Springer respectively, while Doepfner and Friede Springer hold 21.9% and 22.5%.
The planned spin-off sees KKR and CPP Investments owning the majority of classifieds, which includes jobs portal Stepstone and real estate website Aviv, while Doepfner and Springer will retain minority stakes.
Axel Springer had been preparing to take Stepstone public, but the planned initial public offering was put on hold due to the outbreak of war in Ukraine in 2022.
According to industry sources, KKR and CPP Investments may now plan an IPO in the second half of 2025.
Aviv has also been considered a potential candidate for an IPO, but sources said the company is not ready yet.