Hearst Corp. is nearing completion of its $921 million (€640 million) acquisition of French media conglomerate Lagardère SCA. It’s finalized the purchase of Hachette Filipacchi Media U.S., which gives the publisher control of nearly 100 titles in 14 countries outside of France. On top of the magazines, the deal adds some 50 websites and various mobile and tablet apps. A deal for the Russian, Ukraine and the U.K. properties are expected to close soon, followed by China later in the year, following regulatory approvals.
The non-French magazine division made €774 ($1061.15/£666.34) million in revenue last year. When the deal was initially struck earlier this year, Lagardère acknowledged that “(the) magazine business is lacking scale in most countries and requires large investments to make it a sustainable platform, in particular in light of digital technology evolutions” and therefore was looking for a company it could transfer those assets to.
Hachette Filipacchi Media U.S., the publisher of Elle, Woman’s Day and Car and Driver, went through massive cost cutting in 2010 and 2009, as did much of the magazine business. But that was not enough for Lagardère to continue its interest.
Hearst believes it has the scale required to make more of the business than Lagardère could or was interested in doing.
Aside from bulking up on titles, Hearst believes its expansion from magazine publishing to other areas, especially integrated marketing services of the kind offered by its other major of acquisition iCrossing, a $325 million deal that celebrates its first anniversary under Hearst this week, the company will look to these brands to serve as extensions of its e-commerce/social shopping plans as well.