NEW YORK — After a trying few years, Bertelsmann is ending its presence in the U.S.
The German media conglomerate has reached an agreement to sell the assets of Gruner + Jahr USA Publishing, its New York-based subsidiary, to Meredith Corp. for $350 million. The transaction, scheduled to close June 30, will include Family Circle, Parents, Child and Fitness magazines. G+J has until then to find a buyer for its two business titles, Fast Company and Inc.; otherwise, Meredith will acquire them with the intention of selling them. Meredith did not disclose how much extra it would pay for the two titles.
The announcement came almost a year to the day after G+J hired Russell Denson as president and chief executive officer. Denson, who presided over the sale of Weider Publications to American Media in 2002, has consistently denied that his cost-cutting at G+J was designed to prepare the company for a sale. In a phone interview Tuesday, he said he played no part in the talks with Meredith.
“This was a decision made in Germany and executed at that level,” he said. “I only became aware of it very recently. On a personal level, I’m disappointed with the decision. I thought we had made — as a matter of fact, I know we had made — great progress.”
Denson is almost certain to lose his job as a result of the deal, along with an undetermined number of G+J’s approximately 625 employees. In a conference call, Steve Lacy, Meredith’s president and chief operating officer, said the company would retain “the individuals that are closest to the properties on the creative side and the sales and marketing side. It’s when you get to some of the support functions that it is less clear.”
Denson said he would see the deal through before considering his next career move: “I’m not quite ready to go to full-time ranching.”
Another G+J executive likely to be affected is Carolyn Bekkedahl, who was hired earlier this month as executive vice president and group publisher overseeing sales and marketing for all of the company’s titles except Fitness.
It’s unclear whether former YM editor in chief Linda Fears, who has been developing a low-priced women’s service magazine, will continue the project at Meredith. Neither Fears nor a Meredith spokesman responded to a request for comment.
Fast Company and Inc. are both relatively recent acquisitions for G+J. The company, then headed by ceo Dan Brewster, purchased the two business titles in 2000 for a combined sum of more than $500 million. McGraw-Hill, Time Inc. and CurtCo Media are all considered potential buyers. Another company that will take a look is Frank Media, which recently bought Business Traveller and Travel Savvy magazines. “We’re considering almost everything that comes our way,” said Frank Media’s Steve Schragis.
For Meredith, the acquisition means a substantial increase in size. According to president and ceo William T. Kerr, the Meredith Publishing Group’s revenue will swell by $300 million, to approximately $1.2 billion. The number of newsstand pockets Meredith controls will go up by 250,000 to nearly 1 million. Kerr said the discussions with Bertelsmann have been taking place “on and off for over a year.”