By Douglas Busvine
BERLIN – European broadcaster RTL said its German unit would acquire publishing house Gruner + Jahr from its parent Bertelsmann for 230 million euros ($272 million), as it reported strong results and raised its guidance.
The agreed deal will “create Germany’s first cross-media champion”, RTLCEO Thomas Rabe said, after he launched a series of deals this year to merge or sell its TV operations in France and the Benelux countries.
Rabe, who also heads Bertelsmann, has embarked on a strategy of consolidating Europe’s national TV markets in the face of competition from U.S. streaming giants led by Netflix and Amazon Prime.
His biggest move to date has been the merger of RTL‘s French unit M6 with TF1. The deal has been widely interpreted as a prelude to a German-centric TV merger with ProSiebenSat.1 Media.
Rabe has done little to dispel that idea and, in a call with journalists, ruled in the possibility of a tie-up with Munich-based ProSieben while adding that RTL would need first to wrap up its current crop of deals.
“In the next two or three years I would not rule out that we can get closer to ProSieben,” Rabe told reporters.
He added that the French and Dutch deals would first need to win antitrust approval and, should that be given, it would set an important precedent for a possible TV tie-up in Germany.
ProSieben, in which Italy’s Mediaset holds a large minority stake, is widely considered to be in play as a merger target although CEO Rainer Beaujean says it has a viable future as a diversified digital enterprise.
The Gruner + Jahr deal amounts to an internal reorganization of the Bertelsmann group’s journalistic businesses, bringing titles such as news weekly Stern and women’s magazine Brigitte together with RTL‘s German broadcasting operation.
RTL estimates that it will generate synergies of around 100 million euros per year.
RTL also reported a strong recovery in its business in the second quarter, with revenue up 36% from the same period a year earlier, when the coronavirus pandemic led European governments to lock down their economies.
TV advertising revenue surged by 65% in the quarter, echoing similar strength at German rival ProSiebenSat.1 Media in results on Thursday that showed a sevenfold rise in profit.
RTL raised its revenue outlook for the year to 6.5 billion euros from 6.2 billion and lifted its forecast for adjusted earnings before interest, taxation and amortisation (EBITA) to 1.05 billion euros from 975 million.
RTL also set a long-term goal for its Fremantle global content business to achieve annual revenue of 3 billion euros by 2025 through organic growth and acquisitions.
($1 = 0.8457 euros)