Hearst Completes Most of Lagardere Acquisition, Including Hachette in U.S.
The deal, worth $919 million, includes nearly 100 magazines and 50 websites.
Hearst Corp. announced today that it has completed the U.S. portion and the majority of its $919 million acquisition of Lagerdere SCA's nearly 100 magazines outside the French market. The deal, which had been undergoing regulatory approval in 15 different countries, was expected to close in the third quarter of 2011. ¬†
The deal includes nearly 50 websites outside the French market and publishing rights to media brands such as Elle and Elle Decor, ownership of Woman's Day, Car and Driver and Road & Track. Hearst says it will begin immediately integrating those titles into its Magazine Group. The new Hearst magazine portfolio includes more than 300 titles.¬†
"Today's news represents a rare opportunity to advance Hearst Corporation's position as a leading U.S. media company and significantly expand our presence domestically, internationally and in major emerging markets," said Hearst Corp. CEO Frank A. Bennack Jr. in a statement. "Above all, the deal underscores our committment and belief in magazines and the brands and content they represent."
In March, Hearst Magazine president David Carey said the Hearst/Lagardere deal will split total magazine revenue 50 percent in the U.S., 50 percent internationally. Carey also said added that overall ad pages for Hearst grew 10 percent in 2010 and that the company is "bullish on the magazine medium...bullish in the U.S. but more bullish outside the U.S., especially in China and Russia."
The New York Post, which previously said the merger could result in the downsizing of 30 percent or more of the workforce, now says most Hachette employees will be kept on.
In a note addressed to Hearst staff, Bennack and Carey say,¬†
Dear Hearst Colleagues‚ÄĒ
We are pleased to report that we have completed the U.S. portion and the majority of our overall transaction with Lagard√®re SCA to acquire the company‚Äôs nearly 100 titles in 14 countries outside of France as well as extensive digital operations‚ÄĒsome 50 websites and numerous mobile and tablet applications. These include the magazines operated by Hachette Filipacchi Media U.S. and Lagard√®re‚Äôs brands in Italy, Spain, Japan, Netherlands, Hong Kong, Mexico, Taiwan, Canada and Germany. The transaction is expected to be completed shortly in Russia, Ukraine and the U.K., followed by China later in the year, after all necessary regulatory approvals have been obtained.
In the U.S. portion of the deal, we gain U.S. publishing rights in perpetuity to two global media superbrands, ELLE and ELLE D√ČCOR, and ownership of Woman‚Äôs Day and its special interest publications, as well as Car and Driver and Road & Track. We will immediately begin to integrate these brands into our Magazines Group. Our goal is to move these units into Hearst Tower within six to nine months. Internationally, we gain publishing rights to 13 editions of ELLE and eight editions of ELLE D√ČCOR, as well as ownership of myriad other popular magazine brands around the world.
The acquisition enhances Hearst‚Äôs ability to build further on its leadership positions in the U.S. and overseas by augmenting strong and profitable positions in complementary publishing segments including women‚Äôs (the most dynamic and structurally growing magazine segment), men‚Äôs, shelter, and categories that are new to Hearst including celebrity, TV guides and automotive.
Hearst Magazines now becomes the second-largest U.S. magazine publisher with a circulation of 30,427,242 (Source: ABC, 2H 2010), behind Time Inc., and a substantial global publisher with a portfolio of more than 300 titles.
This is big news that will transform Hearst Magazines and advance the position of Hearst Corporation as a leading media company. It dramatically expands the scope of our print and digital publishing operations, substantially increases our U.S. and global revenues and heightens our presence in major emerging markets. Great opportunities that significantly add to our current businesses don‚Äôt come around very often. The chance to publish ELLE, alongside our own Cosmopolitan and Harper‚Äôs Bazaar, gives us even greater scope in advertising in the fashion and beauty segments.
Lagard√®re and Hachette have done a superb job building and expanding these brands around the world and we expect great success and future growth for them at Hearst.
Jumpstart, Hachette‚Äôs automotive unit, will continue to operate as it does currently.
You will hear more about the integration of these global powerhouses into our Magazines Group in the coming weeks and we thank you in advance for your work in making it as seamless as possible.
This is an exciting event in our corporate history and we are delighted to share it with you!