Bertelsmann to develop education business

Bertelsmann to develop education business

Bertelsmann plans to develop an education business division with the long-term potential to generate €1bn in sales, it was revealed at the company's annual results conference in Berlin this morning (26th March).

Meanwhile Random House chairman and chief executive officer Markus Dohle spoke of "possible further portfolios" in Latin America following its outright acquisition of Spanish-language publisher Random House Mondadori.

Last year Bertelsmann invested in the University Ventures Fund, which partners with entrepreneurs and institutions to establish "transformative" companies in post-secondary education. Today the German media group said it was pursuing a "comparable model" in education to that which it had followed with BMG, which it acquired outright at the start of this month.

Thomas Hesse, executive board member for corporate development and new businesses, said the education sector offered considerable growth potential in China, India and Brazil, and a new business division would be created for Bertelsmann's education activities. The education division would grow through "incubation, start-ups and gradual development over the years", he said.

The news came as Bertelsmann reiterated a company strategy oriented towards growth, and digital and international initiatives, with chairman and c.e.o. Thomas Rabe saying it was Bertelsmann's objective to increase sales share in the US, China, India and Brazil.

At the conference, Dohle indicated that further publishing acquisitions could be on the cards as the company looked to growth in emerging markets. The acquisition of the remaining 50% of Random House Mondadori last November "makes it possible to generate more growth in Latin America, organically and with possible further portfolios", he said.

Dohle described the Penguin Random House merger as "one of the largest and most important transactions [for Bertelsmann] of the last 50 years", adding that it had considerable growth potential both in its core markets and emerging markets such as Asia and Latin America.

Bertelsmann declared that the merged company "will set creative and commercial standards", and Dohle said it would "strengthen the position of publishing in the value chain of the book".

Reflecting on the "absolute record year" and "historic all-time high" of 2012, Dohle said the fact that the stellar success had happened in Bertelsmann's oldest core business, book publishing, was why it was so important for the company to continually invest in content and creativity. "The creative core is and remains the most important success factor for Bertelsmann today and in the future," he said.

Dohle also emphasised the importance of securing the position of bookshops and said there was no conflict between digital launches and support for print publishing. "Print in 50 years will [still] be a large share of our business," he predicted.