August 30, 2018 / 7:04 AM / a month ago

Bertelsmann sees deal to sell Arvato CRM outright in Oct

FRANKFURT, Aug 30 (Reuters) - Bertelsmann hopes to complete a deal to sell its call-centre business this autumn, CEO Thomas Rabe said, as he overhauls the German publishing group in the face of disruption from big U.S. internet platforms.

Rabe put Arvato CRM on the block in January and, announcing improved half-year revenues on Thursday, said he expected to finalise a deal with an outright buyer for the business in the month of October.

“A 100-percent sale is the path we are taking,” Rabe told reporters on a conference call.

He declined to elaborate but sources have said that several buyers were interested in Arvato CRM, which has revenues of 1 billion euros and 36,000 employees. Bertelsmann plans to retain the unit’s French operations.

Bertelsmann reported a 2.4 percent increase in organic revenues in the first half of the year to 8.2 billion euros ($9.56 billion), while profits were broadly flat compared to a year earlier.

The top line was helped by strength at broadcasting arm RTL Group, where results on Wednesday were lifted by its new video-on-demand platforms, and digital initiatives at Bertelsmann’s services and education units.

The publisher - which spans eight divisions - is disposing of Arvato CRM to free up capital to invest in growth projects while seeking to “strengthen the core” at its established units, some of which face headwinds.

These include magazine publishing arm Gruner + Jahr, which faced weak ad revenues in the first half, and Bertelsmann Printing Group, where Rabe said he would take a fresh look at savings after existing job guarantees roll off in 2020.

Growth projects now account for a third of sales, said Rabe, a figure that would rise to 40 percent in the next two to three years.

Yet despite those growth prospects, Europe’s largest media group still lacks scale. According to new rankings compiled by the Institute for Media and Communication in Cologne, Bertelsmann ranked 15th in the world by 2017 revenues. The Top 10 was dominated by American players led by AT&T. ($1 = 0.8575 euros) (Reporting by Douglas Busvine Editing by Maria Sheahan)

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