Axel Springer to Split Up? $14.9 Billion Deal Reported

Reuters and The Financial Times have suggested that Axel Springer, a stakeholder in several European real estate marketplace businesses, is in talks to split up its business to investment firm KKR for €13.5 billion ($14.95 billion).

The reported deal values Axel Springer's classifieds business, including the real estate marketplace operator Aviv Group, at circa €10 billion.

Assuming a deal goes through, the classifieds business would go under majority control of KKR, which is already the single largest shareholder in Axel Springer.

The FT had reported talks between the two businesses in July this year.

Axel Springer hasn't commented on the rumour yet.

Who owns Axel Springer?

KKR is already a majority shareholder in Axel Springer with a 36% stake in the business. KKR is the leading investor that initially took Axel Springer private in 2019 at a valuation of circa €6.7 billion.

German billionaire Mathias Döpfner has a 22% stake in the business. He has been CEO at Axel Springer since 2002 and is also chairman.

Friede Springer, the widow of Axel Springer himself, has a 22% stake, while the Canada Pension Plan Investment Board (CCPIB) holds a 13% stake.

The FT reported that Döpfner would prefer to focus on a new, centralised media business, but he would however retain a minor stake in Aviv and, by extension, the company's real estate classifieds holding.

Meanwhile, KKR is more interested in the real estate segment of Axel Springer.

What does Axel Springer's real estate division look like?

Axel Springer operates the AVIV Group, which includes Immonet, Immowelt (under the name AVIV Germany) and SeLoger, among others:

AVIV Group Assets and Investments

Author's note: Aviv divested of the Spanish business Housell earlier this year. 

Other major brands in the Axel Springer network include Bild, Germany's biggest media brand; Welt, a European multimedia brand;  Politico, a political news operation; the Stepstone Group, an AI-driven recruitment marketplace; and Business Insider.

Who is KKR?

Kohlberg Kravis Roberts & Co, also known as KKR, is an American global investment firm, listed on the New York Stock Exchange, with over 200 active investments and over $75 billion invested in the real estate industry.

The short version is that KKR has an active and extensive interest in real estate, so taking ownership of AVIV Group would not pose a significant hurdle or unforeseen challenges given its ongoing shareholding in Axel Springer.

According to KKR's Q2 2024 financial statement released this July, the firm has assets under management of $601 billion with up to $108 billion in 'dry powder'.

The firm says its Opportunistic Real Estate Portfolio has yielded a return of 3% in the last 12 months and represents circa 12% of the firm's total investment holdings.

KKR says it invested $8 billion in real estate equity in Q2, and $14 billion YTD, with record high activity investing in real estate equity specifically in the United States and Asia, infrastructure in Europe, and real estate credit. The firm also made its first real estate equity multifamily investment in the quarter.