Bertelsmann, the Mohn family-owned international media company, has announced plans for a new joint venture with private equity fund KKR & Co.
The venture will involve Bertelsmann's BMG Rights Management unit and will create a new holding company that will facilitate the growth of its music rights management business. Hartwig Masuch, the non-family chief executive of BMG Rights Management, will become CEO of the new company. He said: "KKR shares our views on future business models for the music industry. I am excited to work with such a partner."
Financial terms of the agreement are as yet unknown but the business split will give KKR 51% of the venture and Bertelsmann the other 49%.
This is the second time Bertelsmann has attempted a joint venture within the music business; the company owned a 50% stake in Sony BMG until 2008 when Bertelsmann eventually sold back its share to Sony. The arrangement created the world's second largest recording company but was fraught with difficulty from the outset as the two companies failed to get a management team that could represent both equally. The joint venture was eventually annulled in the European court and the companies cut all ties with one another in October 2008.
Bertelsmann, Europe's largest media company, is owned by founder Carl Bertelsmann's descendents, the Mohn family, and the Bertelsmann Foundation. Latest available figures put the company's revenues at $21.1 billion.