Politico to be acquired by KKR-backed German publisher Axel Springer

German publishing giant Axel Springer SE said it has acquired the U.S. political news organization Politico, which is the most sought after news outlet among the Washington power brokers.

Although the companies did not disclose the deal value, CNN’s Brian Stellar, on Thursday, tweeted, “$1 billion is the ballpark figure.”

Early reports from the New York Times also valued it at about $1 billion, citing people familiar with the matter.

The deal amount is a hefty premium for Politico, which generates about $200 million revenue in a year, making it one of the most expensive media merger deals of late, NYT reported.

For comparison, one of the largest digital publishers in the U.S., Buzzfeed, in June, announced a SPAC deal to go public at a valuation of $1.5 billion, or about three times its annual revenue.

“Politico’s outstanding team has disrupted digital political journalism and set new standards. A true North Star. It will be a privilege and a special responsibility to help shape the future of this outstanding media company,” Axel Springer CEO Mathias Döpfner said.

Axel Springer also acquired the remaining 50% of Politico Europe, the joint venture between the two companies since 2014, and has been profitable since 2019 and acquired the tech news website Protocol, the announcement said.

The release said Politico founder and publisher Robert Allbritton will continue in that role for Politico and Protocol upon the deal’s closure in the fourth quarter of this year.

The German publisher said Politico’s U.S. and Europe editorial and management leadership teams would remain and operate the publications independently from Axel Springer’s other U.S. brands.

The acquisition further grows Axel Springer’s portfolio in the U.S., which is the largest media organization in Europe and behind the major news outlets like Bild and Die Welt in Germany.

Last year, it delisted itself from the Frankfurt stock exchange in a deal led by private equity firm KKR & Co, which holds 44.9% of the publishing giant.

The German publisher has been actively seeking media properties in the U.S. In 2015, the company bought Business Insider for around $500 million, and last year it acquired a controlling stake in the newsletter publisher Morning Brew.

Earlier this summer, Axel Springer was reportedly in talks to acquire Politico’s rival Axios.

Picture Credit: CNBC