Hearst, Lagardere Reach Agreement on Deal
Hearst Corporation announced today it has come to an agreement with Lagardere to buy 102 magazine titles in 15 countries, nearly all of the French media giant's properties outside France. The deal includes transfer of ownership of U.S. titles Woman's Day, Car and Driver, Road & Track and Cycle World, published under the banner of Hachette Filipacchi Media.
Hearst Corporation will be purchasing Lagardere properties—including all associated websites, mobile and tablet applications—in the U.S., Russia, Ukraine, Italy, Spain, U.K., China, Japan, Netherlands, Czech Republic, Hong Kong, Mexico, Taiwan, Canada and Germany.
As part of the deal, Hearst will acquire publishing rights to upscale women's brand Elle in all 15 countries, with Lagardere retaining ownership. A similar arrangement gives Hearst publishing rights to Elle Decor in the U.S. and 9 other countries. Lagardere's desire to retain control of Elle was reportedly a key complicating factor in the negotiations with Hearst, with which it entered into exclusive negotiations Dec. 31. Hearst will pay royalties to Lagardere for use of the Elle and Elle Decor brands.
According to a press release, Hearst has made a binding cash offer of 651 million euros ($886.7 million) for Lagardere's international press and magazine business. The assets being acquired represented revenue of 774 million euros for Lagardere in 2010—according to Reuters, about 40 percent of Lagardere's media revenue last year, but less than 5 percent of its operating profit.
"Along with expected improved results in 2011 and beyond, Hearst anticipates significant synergies with its existing magazine business, particularly in the U.S. and U.K.," the Hearst press release states.
The offer is still subject to government and regulatory approval.