ECONOMY

Axel Springer buys into top Turkish media firm

ISTANBUL (Reuters) – German publisher Axel Springer bought into Turkey’s growing broadcasting market yesterday, signing a deal to buy 25 percent of Dogan TV for 375 million euros ($480 million). Dogan TV’s parent company Dogan Yayin Holding, Turkey’s leading media group, said the sale was in line with a goal of becoming a regional player in broadcasting. «This strategic partnership will pave the way to go beyond our nation’s borders. We are considering this partnership as an important milestone to execute this longer-term strategy,» Dogan Yayin Chief Executive Mehmet Ali Yalcindag said in a statement. Axel Springer will be represented by two board members on the seven-strong management board of Dogan TV Radio after the deal and said the purchase reflected its strategic objectives of internationalization and digitalization. «It is our intention to acquire stakes in leading TV broadcasters in European markets where Axel Springer is either already present through print activities or in European growth markets,» CEO Mathias Doepfner said. The sales deal, valuing the broadcaster at 1.5 billion euros, had been well-signposted and shares in Dogan Yayin, suspended when the announcement was made, gave a muted reaction. They fell 1.57 percent to end the morning session at 6.25 lira. Some 34 percent of the company is publicly traded. «The sales price has to a large extent already been reflected in the share price. Hence there is now selling on the expectation becoming a reality,» said Oyak Investment analyst Ender Oznam in Istanbul. Dominant position Dogan Yayin’s decision to sell the stake reflects a strategy to consolidate its dominant position in Turkish media while anticipating EU membership candidate Turkey’s moves to introduce EU competition regulations to restrict ownership levels. It also marks the entrance of another foreign player into the market. In July, Rupert Murdoch’s News Corp agreed to buy 56.5 percent of Huzur Radyo TV (TGRT) from another Turkish broadcaster for some $80 million. Dogan TV has also been expanding domestically and bought another local broadcaster, Star TV, for $306.5 million in an auction in September 2005. Dogan TV has a 24 percent audience share and 36 percent of the advertising market. Its operation also include leading channels Kanal D and CNN Turk. Dogan Yayin also has eight national newspapers, including major daily newspapers Hurriyet and Milliyet, 24 magazines and eight printing facilities.