Axel Springer and KKR close to $13.5 billion breakup deal

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German tycoon Matthias Döfner and KKR are nearing a deal to split media giant Axel Springer, in a move that would allow one of the world's largest private equity firms to exit media after five turbulent years.

The two sides are expected to discuss the proposed structure of a deal that would give KKR majority control of the company's lucrative classifieds business at a meeting of its supervisory board on Thursday, according to four people familiar with the matter.

The deal – which values ​​the whole company at €13.5bn, including more than €10bn for the classifieds business – has already been discussed several times in previous board meetings, the two said.

The Financial Times first reported that the pair were in talks to split in July.

A deal would enable Duffner, who has served as CEO since 2002, to strengthen his control over the company's media outlets. These include US news sites Politico and Business Insider, as well as German tabloid Bild and its broadsheet Bonn Die Welt.

Döpfner is expected to keep a minority stake in the classifieds division, which includes jobs platform Stepstone and real estate advertising unit Aviv. So is Friday Springer, the company's vice-chair and widow of its founder.

The breakup of Axel Springer will mark a new chapter in a five-year partnership that saw KKR take the company private in 2019 in a deal that valued the publisher at €6.7bn. Together with the Canada Pension Plan Investment Board (CPPIB), it owns a 48.5 percent stake in the Berlin-based business.

KKR will gain greater control over the classifieds unit, paving the way for the New York-based firm to exit its investment. It previously hoped to launch an initial public offering for Stepstone, valuing it at €7bn, but that plan has been repeatedly shelved following a slump in European listings.

The split will free KKR and CPPIB from the succession disputes that have plagued Axel Springer's news business. These include allegations of sexual harassment by a former Bild editor and allegations of editorial interference by Dufner.

More recently, KKR was embroiled in a bitter feud between hedge fund boss Bill Ackman and Business Insider after he disclosed theft claims against his wife.

The split comes as the 61-year-old Dufner, who sits on the boards of Netflix and Warner Music Group and is friends with Elon Musk, looks to expand his footprint in the English-language media market, particularly in the United States. .

He unsuccessfully tried to buy the Financial Times in 2015, instead buying Business Insider later the same year. In 2021, he acquired Politico for about $1 billion.

Axel Springer and KKR declined to comment.