Bertelsmann Plans More Divestitures
July 16, 2008 at 5:42 AM (PT)
GERMAN media giant BERTELSMANN AG plans to further divest itself of struggling book, music and DVD clubs around the world, but maintain footholds in several of EUROPE's biggest markets as part of a broader restructuring to jettison underperforming businesses, reports THE WALL STREET JOURNAL. The planned divestments, when combined with last week's sale of its U.S. clubs, would roughly halve revenue of BERTELSMANN's Direct Group unit. The direct-marketing unit booked EU2.56 billion ($4.07 billion) in sales last year world-wide, down 4.1% from the year earlier and representing 14% of BERTELSMANN's overall revenue for 2007.
BERTELSMANN said in MARCH it was conducting a strategic review of Direct Group after the unit's operating profit last year sank to EU10 million from EU110 million amid rising competition from the Internet. BERTELMANN also is exploring the sale of its 50% stake in SONY BMG MUSIC ENTERTAINMENT
BERTELSMANN could reach an accord to sell its 50% stake in SONY BMG to SONY as early as next month, people familiar with the matter say.
A BERTELSMANN spokesman reiterated TUESDAY that the GERMAN company could sell its stake, buy out SONY's stake or renew the joint venture, which was formed in 2004 and expires next year.