Axel Springer strikes €13.5bn split with KKR to reshape media landscape

In a landmark deal, Axel Springer, owner of Politico and Bild, has agreed to a €13.5 billion split with private equity firm KKR, shaking up the European media sector. The move will divide Axel Springer’s profitable classifieds business from its media operations, allowing the company to focus on its digital news expansion, particularly in the United States.

Under this agreement, Axel Springer’s CEO Mathias Döpfner will retain control over the media arm, while KKR and Canada‘s CPP Investments will own the classifieds division. The split is seen as a strategic realignment that will enable Döpfner to concentrate on growing the influence of titles like Politico and Business Insider.

The deal is expected to be finalised by mid-2025, pending regulatory approval. The separation will pave the way for Döpfner to pursue his long-held ambition to expand Axel Springer’s media footprint, especially in the US market. KKR’s control over the classifieds division, which is valued at more than €10 billion, allows the private equity firm a clearer path to exit its investment, which has been challenging since it took Axel Springer private in 2019.

A decisive moment for Döpfner

For Döpfner, the split offers an opportunity to accelerate his digital ambitions. Having acquired Politico for $1 billion in 2021, he is eager to build Axel Springer’s presence in the American market, where digital media consumption continues to grow. His strategy will likely include further acquisitions to bolster Axel Springer’s influence in the global news sector.

Döpfner, who has championed AI adoption in journalism, plans to use the media arm’s newfound independence to innovate. The company has already partnered with AI companies to explore content generation and monetisation opportunities. By pushing for new revenue models, Döpfner hopes to secure Axel Springer’s position as a leading force in the digital news era.

Key focus on the classifieds business

Meanwhile, the highly lucrative classifieds arm of Axel Springer will remain under the control of KKR and CPP Investments. This segment has thrived due to the rise of digital platforms serving the real estate and job markets. KKR’s decision to hold onto this division underlines its potential for further growth and profitability. The split enables each side to focus on its core strengths, with Döpfner focusing on news media and KKR capitalising on classifieds.

The deal underscores the shifting dynamics within the media industry, as companies pivot towards digital innovation and AI integration. Döpfner’s strategic vision is to make Axel Springer a leader in digital news, while KKR seeks to maximise its return on the profitable classifieds division.

Döpfner’s bold gamble on digital expansion

This strategic split is a defining moment for Axel Springer. Döpfner’s decision to focus on the media arm is a bold gamble, reflecting his belief in the growth potential of digital news. His acquisition of Politico and earlier investments show that he is betting on the rise of politically engaged readers, especially in the United States. While the classifieds business remains a reliable profit generator, the media arm, particularly Politico, is poised to become a significant player in global news.

Döpfner has also shown foresight in adopting AI technologies, which could transform the future of journalism. His deals with AI companies demonstrate his intention to stay ahead of the curve in terms of content creation and monetisation. If successful, Axel Springer could become a pioneer in the AI-driven news industry, blending traditional journalism with cutting-edge technology.

However, this split is not without risk. The media business, while influential, is inherently more volatile than classifieds. Döpfner’s ability to navigate the fast-changing media landscape will determine the long-term success of this bold restructuring.

A transformative deal for Axel Springer and KKR

The €13.5 billion split of Axel Springer marks a pivotal moment for the company. As Döpfner hones in on digital news and KKR takes control of classifieds, both sides are positioning themselves for growth. The future of Axel Springer’s media arm, with a strong focus on digital and AI, will be closely watched as the company seeks to lead the charge in global news.