Bertelsmann revamps ownership

Mohn giving up 90% of his capital stock

MUNICH -- Bertelsmann, the world's third-largest media conglom in terms of sales, unveiled a new ownership and shareholder voting-rights structure Thursday that in the long run could open the closely held company to mergers or partnerships and to stock-market listings.

After 165 years of control by the Mohn family, Bertelsmann's chief shareholder, Reinhard Mohn, 78, said he would give up the 90% of the firm's capital stock that he holds and transfer it and his voting rights to a new management holding.

Mohn will be a shareholder in the new holding, designated Bertelsmann Verwaltungsgesellschaft (BVG), until his death or incapacity, and will be joined by his trustee, two members each from the supervisory board and the executive board, a family representative and an employee representative.

Asked at a news conference if the new structure, effective Thursday, could open the door to a public listing of Bertelsmann stock, Mohn, a descendant of company founder Carl Bertelsmann, dismissed the possibility for the short term but said there would be frequent listings of individual company units.

A number of media companies in Germany have recently sought stock-market listings, with Bertelsmann rival the Kirch Group one of the latest to prepare itself for the stock exchange.

In recent months, several Internet subsidiaries of Bertelsmann have been earmarked for public listing.

Mohn is credited with overseeing Bertelsmann's transformation from the book publisher that was, as he called it, "a heap of rubble" after World War II, into a thriving multimedia concern.

While the new arrangement marks an historic change at the company, the influence of the Mohn family is preserved over the long term in the new structure of the BVG.

For three years after his death, Mohn's seat on the BVG will be held by his handpicked trustee, Siegfried Luther. After this time, Luther will step down, leaving six shareholders.

Five years after Mohn's death, the shareholder structure can be changed with the approval of five of the six BVG members, which is seen as the first possibility for major changes in the corporation's structure.

Asked if the company could consider mergers or strategic partnerships five years after his death, Mohn said it was possible but added that the five-vote requirement would present a sizable hurdle to fundamental change.

(Reuters contributed to this report.)