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Business

Bertelsmann Buys Columbia House in US

German media giant Bertelsmann said Tuesday that its US subsidiary, BMG Direct, had agreed to buy The Columbia House Company from the Blackstone Group for an undisclosed sum. Sources close to the matter said the transaction was worth around $400 million (312 million euros). Bertelsmann was acquiring all of Columbia House, namely the 85-percent held by Blackstone, and two stakes of 7.5 percent held by Sony and Time Warner respectively, the German company said. Columbia House, the biggest specialist retailer of DVDs in the US, would be integrated into BMG Direct, which is the largest direct-to-consumer distributor of recorded music in the US. And BMG Direct's chief executive, Stuart Goldfarb, would take over the running of the newly acquired company, the German company said. A combination of the two businesses "will create broader product offerings" for customers of both BMG Direct and Columbia House, Bertelsmann said. The move "gives us strategic access to the growing DVD sector and also broadens our customer base in the US," said the head of DirectGroup Bertelsmann, Ewald Walgenbach. "In bringing together BMG Direct and Columbia House, we are combining two profitable businesses," he said.