Axel Springer, the Berlin-based transatlantic family-owned news group, has reached a surprise agreement with RedBird IMI to acquire the Telegraph Media Group (TMG) for £575 million in cash. That’s £75mn more than the £500mn that had been previously agreed with the Daily Mail Group, £100mn of whose offer would have been paid up to two years after completion of the acquisition. The Daily Mail bid was anyway subject to regulatory approval on competition grounds, which is not expected to be an issue for Axel Springer.
Springer CEO Mathias Döpfner says: “Axel Springer was founded in 1946 under a British press licence. He built his company inspired by the tradition of Fleet Street. The Telegraph was his North Star. More than 20 years ago, we tried to acquire The Telegraph and did not succeed. Now our dream comes true. To be the owner of this institution of quality British journalism is a privilege and a duty. We want to grow the Telegraph, while preserving its distinctive character and legacy, to help it become the most read and intellectually inspiring center-right media outlet in the English-speaking world. The Telegraph stands for freedom, personal responsibility, democratic values and a belief in open societies and market economies. These convictions closely align with our Axel Springer essential values.”
(In fact, the late Axel Springer was most impressed in the 1940s not by the Telegraph but by the red-top tabloid Daily Mirror which he effectively cloned for his launch of Bild. It has been Germany’s largest daily news brand ever since.)
Döpfner said today: “These Essentials do not limit editorial freedom and independence. They transparently define our societal values. Editorial independence is sacrosanct at Axel Springer. We believe that the best way to safeguard that is through financial and economic success. We see massive growth potential for TMG. Technological excellence and transformation with the best Artificial Intelligence tools is mission critical for this. We look forward to working with the editorial teams led by Chris Evans and Allister Heath and the management team led by (CEO) Anna Jones.We are aware that the amazing journalists and employees at TMG have been operating in an extended period of uncertainty. That is never easy. We want to bring that uncertainty to an end as soon as we can and welcome you into Axel Springer.”
Axel Springer says it’s confident that the proposed acquisition is in the best interests of TMG’s employees, audience and customers because:
- It will back an investment program in TMG to grow and expand the business to enable it to become the leading center-right media outlet in the English-speaking world, in competition with the New York Times and The Guardian;
- It will turbocharge the expansion of TMG into the US market, leveraging its major media brands Politico and Business Insider, in competition, presumably, with the New York Times, Wall Street Journal and the Washington Post.
RedBird IMI added: “Following a swift and efficient negotiation, we are pleased to have reached an agreement with Axel Springer to purchase RedBird IMI’s interest in the Daily Telegraph newspaper. With the strength of their commercial offer and a straightforward regulatory path to ownership we believe that Axel Springer is well placed to take the Telegraph forward into its next chapter. Our team is now working closely with the UK Government to obtain the necessary approvals to finalize this transaction.”
The parties believe that the transaction is fully compliant with the UK’s Foreign State Influence legislation which had earlier led to the RedBird acquisition being blocked because of its UAE funding. The Springer coup is a blow for the Mail group whose owner Lord Rothermere has long wanted to bring the two right-wing news brands together. The Mail currently sells advertising for the Telegraph and also co-owns ( with News Corp) its printer.
The Springer deal followed a recent discussion which had the company agreeing to participate in a consortium bid led by New York Sun publisher Dovid Efune. But the final deal is now 100% Axel Springer with Efune being paid a substantial fee for his involvement in the process of evaluation.
