German publisher Axel Springer said Friday it would buy a majority stake in ProSiebenSAT.1, Germany's largest TV group, in a 2.5 billion euro ($3.05 billion) deal to create the nation's second-biggest media group.
The deal creates Germany's second biggest media group
ProSiebenSAT.1 is currently controlled by a consortium of US investors led by US-Israeli businessman Haim Saban and a number of investment funds. The consortium, P7S1 Holding, has held 50.5 percent of the capital and 88 percent of the voting rights since 2003.
Springer, publisher of the German mass-circulation daily Bild, owns 12 percent of the capital and voting rights of the broadcaster.
Springer's headquarters in Berlin
Under the terms of the offer, P7S1 Holding will receive a cash payment of 23.37 euros for each vote-wielding common share in ProSiebenSAT.1 and 14.10 euros for each preferred share without voting rights, Springer said in a statement.
In addition, it will receive 820,000 Springer shares worth 75 million euros.
Springer takes full control
After the close of the deal, Springer would own 100 percent of the votes in ProSieben, and 25 percent of the preferred shares.
Axel Springer also said it intended to make a public offer to ProSiebenSAT.1's minority shareholders.
The supervisory board of Springer approved the transaction on Thursday. The management board of ProSiebenSAT.1 Media has stated that based upon the information available to it, it regards the combination of both companies favourably, Springer said.
Second largest conglomerate
Springer intends to merge its operations with ProSiebenSAT.1 once the deal is approved by regulators. With combined sales of 4.2 billion euros in 2004, it would then be second in Germany only to the world's fourth-largest media group, Bertelsmann, which had 5.1 billion euros in sales in its home market last year.
The deal fulfills a dream of Springer's late founder and namesake, Axel Springer, to marry the content and advertising power of Bild with television.