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MarketScreener Homepage  >  Equities  >  Xetra  >  RTL Group S.A.    RRTL   LU0061462528

RTL GROUP S.A.

(RRTL)
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Bertelsmann buys Simon & Schuster for $2.2 billion in U.S. publishing play

11/25/2020 | 02:07pm EST
FILE PHOTO: Pencils with the logo of German media group Bertelsmann CEO are seen at the annual news conference Berlin

BERLIN (Reuters) - German media group Bertelsmann has agreed to purchase publisher Simon & Schuster for $2.175 billion (1.63 billion pounds) in cash from ViacomCBS, strengthening its presence in the United States.

Bertelsmann outbid Rupert Murdoch's News Corp in a contest for the publisher of Dan Brown, Hillary Clinton and Stephen King which Viacom put on the block earlier this year.

The deal represents the second major move in CEO Thomas Rabe's drive to consolidate Bertelsmann as the world's biggest bookseller, after the 185-year-old publisher took full control of Penguin Random House less than a year ago.

"We are building our position as one of the leading creative content companies in the United States," Rabe said on Wednesday of the move deeper into Bertelsmann's second-largest market.

"I'm convinced that this a good day both for book publishing and for authors."

The acquisition of Simon & Schuster, which reported revenue of $814 million in 2019, is profitable and employs 1,500 staff, is expected to close in 2021 subject to U.S. antitrust approval.

The merged entity would have a U.S. market share of less than 20%, making the transaction "approvable", Rabe told reporters.

However, News Corp CEO Robert Thomson criticised the deal, which he said had an "anti-market logic".

"Bertelsmann is not just buying a book publisher, but buying market dominance as a book behemoth. Distributors, retailers, authors and readers would be paying for this proposed deal for a very long time to come," Thomson added.

TALKING BOOKS

Jonathan Karp and Dennis Eulau will stay on to run Simon & Schuster under the umbrella of the far larger Penguin Random House. Combining printing, sales and distribution would deliver significant synergies, Rabe said.

Size is important in publishing as bestseller lists become dominated by a handful of blockbusters - such as Penguin Random House's edition of ex-U.S. President Barack Obama's memoir 'A Promised Land'.

But overall U.S. book sales have been growing by a mere 1% a year, according to the American Association of Publishers, as readers are distracted by social media and other online formats.

Rabe described books as the "past, present and future" of Bertelsmann but also highlighted the U.S. publishing deal's significance for its digital content as people turn to e-books or listen to narrated 'talking' books.

CASHING IN

Founded in 1835 as a publisher of theological texts, Bertelsmann is a private conglomerate spanning magazine, educational and music publishing and controls European TV group RTL.

Rabe is restructuring to reduce its exposure to declining areas such as printing, has merged its Arvato CRM customer services unit, and made a string of smaller technology bets.

The lack of its own public equity to serve as an acquisition 'currency' has constrained Bertelsmann's ability to chase big deals, even as tech giants led by Facebook and Alphabet's Google suck up more ad dollars.

Yet Rabe was able to pay cash after this year building a war chest of 4.3 billion euros ($5.1 billion) in liquid funds.

Rabe pulled this off by retrenching during the coronavirus crisis, and selling other investments and property. And, while Bertelsmann's focus is mainly on organic growth, it has the capacity to do further deals, he added.

ViacomCBS, which was advised by LionTree Advisors and Shearman & Sterling LLP, said it would plough the sale proceeds into its streaming operations, fund its dividend and repay debt.

(Writing by Douglas Busvine; Editing by Louise Heavens and Alexander Smith)

By Douglas Busvine and Klaus Lauer


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET INC. -0.19% 1727.62 Delayed Quote.-1.43%
FACEBOOK INC 2.33% 251.36 Delayed Quote.-7.98%
NEWS CORPORATION 0.05% 18.7 Delayed Quote.4.06%
RTL GROUP S.A. 0.34% 40.9 Delayed Quote.2.92%
VIACOMCBS INC. -0.80% 45.85 Delayed Quote.21.23%
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Financials
Sales 2020 5 890 M 7 112 M 7 112 M
Net income 2020 425 M 514 M 514 M
Net Debt 2020 251 M 304 M 304 M
P/E ratio 2020 14,3x
Yield 2020 6,32%
Capitalization 6 278 M 7 591 M 7 581 M
EV / Sales 2020 1,11x
EV / Sales 2021 1,05x
Nbr of Employees 16 264
Free-Float 23,0%
Chart RTL GROUP S.A.
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RTL Group S.A. Technical Analysis Chart | RRTL | LU0061462528 | MarketScreener
Technical analysis trends RTL GROUP S.A.
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 11
Average target price 38,32 €
Last Close Price 40,90 €
Spread / Highest target 12,5%
Spread / Average Target -6,31%
Spread / Lowest Target -34,0%
EPS Revisions
Managers and Directors
NameTitle
Thomas Hermann Rabe Chief Executive Officer & Executive Director
Martin Taylor Chairman
Elmar Heggen COO, Deputy CEO & Executive Director
BjŲrn Bauer Chief Financial Officer
Vincent Pascaud Senior Vice President-Group IT & IT Governance
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