With his French hosts and his international CEO at his side, Frank A. Bennack Jr., CEO of Hearst Corp., signed the deal in Paris this evening to buy Lagardère’s non-French properties, including Hachette Filipacchi Media in the U.S.—a deal that will make Hearst the No. 2 U.S. magazine company by ad pages after Time Inc.
At his side was Duncan Edwards, president and CEO of Hearst Magazines International. Edwards, who is fluent in French, made a number of presentations in French at meetings over the course of the deal. Also on hand was James Asher, Hearst’s chief development and legal officer, and one of the architects of the sale. They'll dine with Lagardère heads at the legendary Paris restaurant Taillevent to fête the deal, which is believed to have been more than a year in the making.
Because of the complexity of the sale—it involved close to 100 titles in 14 countries—the closing is happening in stages. Today’s announcement covers the U.S. portion, which comprises Hachette, parent of Elle, Woman’s Day, and Car and Driver; and Lagardère’s magazines in Italy, Spain, Japan, Netherlands, Hong Kong, Mexico, Taiwan, Canada, and Germany. Russia, Ukraine, the U.K., and China closings are expected to follow later in the year.
Now that the deal is done, the cone of silence that’s surrounded it will likely dissolve.
One of Hearst’s first challenges will be to smooth ruffled feathers among now-former Hachette employees, who have been in the dark since rumors of the transaction began surfacing months ago. Beginning Wednesday, Hearst will host dinners and breakfasts at Hearst’s Eighth Avenue glass tower for the former Hachette editorial and publishing teams. Starting June 6, they’ll be invited to orientation sessions at the tower, known to Hachette employees as the “greenhouse,” with Hearst Magazines president David Carey and his deputies Michael Clinton, Ellen Levine, and John Loughlin. Also this week, Carey will meet around 150 higher-ups at Hearst to brief them on the deal.
“We thought about giving [Hachette employees] Café 57 credits so the first week they’re here they can dine there,” said Paul Luthringer, a spokesman for Hearst, of the tower’s cafeteria. “It’s safe to say they’ll get some kind of welcome gift."
Hearst has a big integration ahead of it. It anticipates the move of the former Hachette employees into the tower to take six to nine months.