DM 1-billion deal seen as first step to major world expansion in STM fieldBertelsmann is buying a majority share, 80%, of Springer Verlag, the German professional publishing house with a major outpost in the U.S., in the first of what is expected to be a series of moves to make the giant a world player in the field.

Bertelsmann spokesman Helmut Runde, speaking to PW from company headquarters in Gutersloh, declined to confirm or deny that the price was DM 1 billion ($600 million), as had been reported, though he agreed it was "in this area." The deal, which has been approved by Springer stockholders, is expected to be signed within days, but is subject to approval by the cartel office of the European Community in Brussels, and by the German government in Berlin. (Objections from Brussels torped d an attempt last year by the two biggest players in the field, Reed Elsevier and Wolters Kluwer, to combine.)Springer Verlag, which is based in Heidelberg and Berlin, also has offices in New York, and U.S. sales represent approximately 25% ($92 million) of its worldwide sales of about DM 615 million ($370 million). Rudiger Gebauer, president and CEO of the U.S. operations, told PW that the Bertelsmann deal would enable his company to "further expand our program for the electronic dissemination of information." He also noted that though Bertelsmann already has a professional publishing division, with sales of around the same level, DM 600 million annually, "They are not directly in the scientific, technical and medical [STM] market, which is our most important one." There were therefore "many potential synergies" in the new ownership. "The two publishers complement each other ideally in their programs of specialist information," he declared.

Springer Verlag in the U.S., which also includes Birkhauser Boston and Telos, the Electronic Library of Science, has about 300 employees, and Gebauer said he did not expect any immediate changes. The entire company, which also has offices in London and Tokyo, publishes more than 2200 books and 500 journals a year, 60% of them in English. Asia is an important market, in addition to Europe and the U.S.

According to Runde, the move is part of an effort by Bertelsmann to expand its professional publishing side "to a size where it can be truly competitive in the international arena." Further expansion of its professional publishing is expected in cooperation with the giant Havas group in France, details of which are expected soon. Gebauer noted that the new deals would bring worldwide revenues into the neighborhood of $2.5 billion, making Bertelsmann one of the world's largest professional information publishers.