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Naspers buys into Brazilian media

8 May 2006

South African media giant Naspers has acquired 30% of Abril, the largest magazine publisher in Brazil and one of the largest media companies in Latin America, for the sum of US$422-million (R2.5-billion).

The purchase gives Naspers a stake in the growing Brazilian media market as well as in strong emerging markets worldwide, Naspers said on Monday.

"The acquisition is in line with Naspers’s strategy to expand into new markets," the company said.

"In particular, the group is focused on the BRICSA countries (Brazil, Russia, India, China, South and sub-Saharan Africa), which present attractive growth opportunities.

To date, Naspers has had some success in establishing a presence in China. This transaction will establish a solid presence in Brazil.

"Brazil is an attractive market, where strong economic growth is expected to drive domestic media growth. The acquisition also provides Naspers with the opportunity to apply its expertise in emerging markets."

Big in Brazil

Abril has a 54% share of magazine circulation and 58% of magazine advertising revenues in Brazil, and publishes five of the top 10 magazine titles in that country. Its flagship newsweekly, Veja, is the fourth-highest-selling weekly in the world. It has a circulation of some 1.1-million and an average readership of 8-million - the largest of any magazine not owned by a US-based group in the world.

Abril also owns a pay-television network and is Brazil's leading educational book publisher.

Abril will use the proceeds of the sale to reduce debt and fund business expansion, Naspers said.

After the transaction, the Civita family will hold 70% of Abril and Naspers 30%. Naspers will fund the deal from existing cash resources. Abril's current management team, headed by chairperson and CEO Robert Civita, will continue to lead the company.

Naspers is a multinational media company with principal operations in electronic media - including internet publishing and pay television - and print media, including publishing, printing and the distribution of magazines, newspapers and books.

The company's most significant operations are in South Africa, where it generates about 72.7% of its revenue, with other significant operations elsewhere in sub-Saharan Africa, Greece, Cyprus, the Netherlands, the US, Thailand and China.

SAinfo reporter