Haaretz announced the acquisition of 25 percent of the share capital of Haaretz Group by M. DuMont Schauberg, a publisher from Cologne, Germany. DuMont is one of the oldest publishers in Germany, headquartered in Cologne and publishing a number of newspapers and magazines, as well as substantial holdings in book publishing, radio and mail. The straight equity investment into Haaretz Group will be 25 million euros, reflecting a post-money valuation of 100 million euros or $130 million. The Haaretz Group stated in response that the deal expressed the substantial growth in the number of subscribers as well as in advertising revenues of the daily Haaretz and improved profitability of the Group over the past 18 months.
The Haaretz Group includes the daily, local weeklies, 33 percent of Internet portal Walla!, financial Internet site TheMarker and a printing press. In addition, the Schocken family owns an imprint and real estate.
Haaretz is Israel's third largest newspaper, and is wholly-owned by the Schocken family. In the historic deal, publisher Amos Schocken will relinquish the family-ownership structure of the newspaper which was founded in 1919 and purchased by his grandfather Salman Schocken 71 years ago. Haaretz is the last Israeli daily to relinquish family ownership in entirety, after Yedioth Ahronoth and Maariv did so in the late 90s.
According to the group's announcement, the decision to raise capital for Haaretz was made more than a year ago when the company realized there was an opportunity to develop and strengthen the activities, but that better financing for that was needed. The plans for further development of Haaretz and the local weeklies call for a significant amount of investment. There is a lot of potential for development of Haaretz Group internet activities. After several years in which the company invested heavily in printing capacity and internet presence, resulting also in a major share of Walla! Israel's leading portal, the company also wanted to strengthen its balance sheet.
In terms of revenues, and excluding Walla!, Haaretz is the second largest media company in Israel.
The Haaretz Group stated it was proud of the daily's unique standing in Israel. "Due to its special high quality character and its very successful English edition, both in print and on the Internet, it has a significant worldwide recognition and presence. TheMarker has developed in a very short time to become the leading Israeli brand in business communication. Ha'ir, Kol Ha'ir and Kolbo are strong brands in their respective local markets, and Achbar Ha'ir (City Mouse) is the most widely distributed entertainment guide. Walla! is certainly one of the strongest brands in Israeli Internet. All these brands are now getting a much stronger financial footing, and their growth and development can be now planned and implemented."
Former Israeli ambassador to Germany Avi Primor made the introduction between the two companies, and will also join the Haaretz board of directors on behalf of the new shareholder.
Haaretz said, "In M. DuMont Schauberg, Haaretz found a publisher of many years, with deep understanding of the public service aspect of this business, with similar values, and one that looks for a very long-term relationship."
The group emphasized that in M. DuMont Schauberg it had found a partner with commitment to, and understanding of, the important consideration that the company's journalists operate in complete professional freedom.
The group added that the introduction to Haaretz of a German partner is done with full recognition of the painful past of the Jewish people in Germany, but also with recognition that, as Prime Minister Ehud Olmert recently said, Germany is one of Israel's best and closest allies. Of course Germany is an important economic partner of Israel, and this investment, completed in tough times like the present, joins the many other business deals between Israelis and German people. Michal Ramati adds: M. DuMont Schauberg has a storied history believed to originate in Cologne of 1620. At the time, Bertram Hilden established a printing chain that specialized in prayer books. In 1664, the company's first newspaper was published in Latin, followed later by newspapers in the German language.
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