German publisher Axel Springer AG has announced its intention to buy a controlling stake in broadcaster ProSiebenSat1 Media AG from a US group for $3.1 billion, setting the company up for a showdown with media titan Bertelsmann AG.
The deal, which will combine the country's best-selling newspaper publisher with Germany's biggest television company, will take place in several stages.
First, Axel Springer - which already holds 12 percent of the shares that are not publicly traded in ProSieben - will buy the other 88 percent from the P7S1 Holding LP consortium led by US billionaire Haim Saban.
Springer will also buy the traded preferred shares that the consortium holds, to increase its common share stake to 25 percent, paying €2.5 billion for the package. Additionally, Saban's consortium will get a 2.4 percent stake in Springer.
Ultimately, Axel Springer said it intends to merge the two companies.
The deal will give Springer the ability to package ProSiebenSat.1's popular programming, including the US hit series "Desperate Housewives," with its top-selling national Bildtabloid and other magazines to generate more ad revenue.
All of which puts the company in a position to challenge Bertelsmann, which owns the RTL television channel and Stern Magazine. ProSieben owns the Sat.1, ProSieben, kabel eins and N24 networks in Germany.