French media conglomerate Lagardère says it’s received a binding offer from Hearst of €651 ($892.52/£560.45) million for its non-French magazine business (release).
The portfolio includes 102 titles in 15 countries, including the U.S. and UK, plus a license to go on publishing Elle on multiple platforms in those countries. The license costs €8 ($10.97/£6.89) million per year, totalling €70 ($95.97/£60.26) million. Heart will publish Elle alongside its Harper’s Bazaar and Cosmopolitan.
The division made €774 ($1061.15/£666.34) million in revenue in 2010, but Lagardère says “(the) magazine business is lacking scale in most countries and requires large investments to make it a sustainable platform, in particular in light of digital technology evolutions”.
It wants to exit from “slower growth segments” like this.
Reuters: “The deal comes as CEO Arnaud Lagardere tries to turn around Lagardere after years of underperformance by selling off weak assets and minority stakes, investing in its new sports marketing division and focusing on its core media businesses.
“After its U.S. magazine unit was hit hard by an advertising slump during the economic crisis, Arnaud Lagardere decided the business was too small in the United States to compete with larger rivals Conde Nast, Hearst and Meredith.”