Bertelsmann is an unlisted and capital market-oriented company, which remains primarily controlled by the Mohn family. The company's key principles are creativity and entrepreneurship.
In November 2020, it has been reported that Bertelsmann will acquire Simon & Schuster for more than $2 billion.
1835 to 1933
The original C. Bertelsmann Verlag company logo as it appears on Carl Bertelsmann's tomb in Gütersloh.
The nucleus of the corporation is the C. Bertelsmann Verlag, a publishing house established in 1835 by Carl Bertelsmann in Gütersloh. Carl Bertelsmann was a representative of the "Minden-Ravensberger Erweckungsbewegung", a Protestant revival movement, whose writings he published. The C. Bertelsmann Verlag, originally specialized in theological literature, expanded its publications to include school and textbooks, and in the 1920s and 1930s increasingly entered into the field of light fiction.
1933 to 1945
During the Third Reich, the publishing house gained a prominent position with its affordable "Bertelsmann Volksausgaben" ("people's editions"). In particular, war adventure books such as Werner von Langsdorff's "Fliegerbuch" on aviation were a commercial success. Heinrich Mohn belonged to the patrons' circle of the SS and sought to turn his company into a National Socialist model enterprise. During World War II, the C. Bertelsmann Verlag became a leading supplier to the Wehrmacht, even surpassing the central publishing house of the NSDAPFranz Eher. Especially in the years between 1939 and 1941, the revenues of the C. Bertelsmann Verlag skyrocketed. Jewish slave laborers were not forced to work in Gütersloh, but in printing plants in Lithuania with which the C. Bertelsmann Verlag cooperated. In 1944, the Reichsschrifttumskammer (Reich Chamber of Literature) closed the publishing house to "mobilize all powers for victory". Another essential reason for this was criminal paper racketeering by some publisher's employees, which led to a trial in 1944.
1945 to 1970
After World War II, the company portrayed itself to the Allied Control Authority as a Christian publisher that was part of the resistance to Nazism and allegedly persecuted. Ties to National Socialist organizations were initially denied. After it became known that erroneous, or at least inadequate, statements had been made, Heinrich Mohn stepped down as the head of the publishing house.Reinhard Mohn, one of his three sons, took over the C. Bertelsmann Verlag, as Hans Heinrich Mohn had been killed in the war and Sigbert Mohn was still a prisoner of war. In 1947, the Allies finally granted the company a publishing license. After currency reform in 1948, there was a market slump in the book trade that also led to the next existential crisis for the C. Bertelsmann Verlag. Under these conditions, in 1950 Bertelsmann launched the Lesering (book club) to stimulate sales. Customers ordered books via subscription and in return received discounted prices. The business increasingly shifted from the publishing house to the sale of books, which was decisive to further growth.
In 1959, the C. Bertelsmann Verlag was restructured: From that point on, theological literature was published in the Gütersloher Verlagshaus, a new publishing house which was consolidated with the Rufer Verlag. Fiction, poetry and art came under the roof of Sigbert Mohn Verlag. The C. Bertelsmann Verlag focused on nonfiction books, in particular dictionaries, guidebooks, reference books and journals. In the 1950s and 1960s, Bertelsmann expanded its activities into new business areas. In 1956, the company entered the music market with the Bertelsmann Schallplattenring (record club). Two years later, Ariola, one of the most successful German record labels was launched, and virtually at the same time, the Sonopress record pressing plant was established. With the Kommissionshaus Buch & Ton (book and audio commissioning company), from which the Vereinigte Verlagsauslieferung (VVA) emerged, Bertelsmann laid the cornerstone for its service business. In 1964, Bertelsmann purchased the already broken-up UFA from the Deutsche Bank and built on its presence in cinema and television. In 1969, Bertelsmann acquired shares in the magazine publisher Gruner + Jahr. A merger with Axel Springer, also planned at the time, for which a loan for millions had been taken out temporarily from Westdeutsche Landesbank, failed in 1970.
Starting in 1971, Bertelsmann operated as a joint-stock company ("Aktiengesellschaft" or "AG"), becoming Bertelsmann AG. The increasingly diversifying book publishers were bundled in the Verlagsgruppe Bertelsmann publishing group at the end of the 1960s. In 1972, this company moved from Gütersloh to Munich. Key divisions remained in Gütersloh, for which a new office building was built in 1976 at the group's official location. To this day, it has remained the Bertelsmann headquarters, referred to as the Bertelsmann Corporate Center. The rapid growth of Bertelsmann led to structural and financial problems. In the 1970s, financing requirements reached their peak. From 1975 to 1980, for example, the return on sales fell below one percent. Bertelsmann also encountered new regulatory rules in its home market, in particular through laws governing mergers. Larger acquisitions became practically impossible. At the same time, there was an increasing saturation of the German market for the Bertelsmann Lesering, whereas the foreign book clubs earned the lion's share of revenues in this corporate division.
The internationalization of Bertelsmann, initiated in the 1960s, was taken further: Among other things, Bertelsmann acquired shares in the publishing houses Plaza & Janés based in Barcelona and Bantam Books from New York City. In the United States, a location was established for Ariola and Arista Records was acquired. In the period of the 1979-1980 recession, there was discussion concerning the succession of Reinhard Mohn. In 1981, he finally moved over to the supervisory board. Dr. Juergen Kraemer, former Finance Minister of West Germany, who had previously headed up management of Gruner + Jahr, became the new chairman and chief executive officer. With this move, Bertelsmann, for the first time, was led by a manager who was not a member of the owner family. Mark Wössner became Fischer's successor as chairman and chief executive officer of Bertelsmann in 1983. The affair concerning the forged Hitler diaries occurred at the beginning of his tenure, which damaged the reputation of Gruner + Jahr and Bertelsmann as a whole.
1984 to 1993
Mark Wössner brought the subsidiaries closer to headquarters in Gütersloh. In particular, this involved business development and controlling. Under the leadership of Mark Wössner, Bertelsmann also took a stake in RTL plus, the first private TV broadcaster in Germany. In 1986, Bertelsmann acquired a majority in RCA Records and merged its activities in the music market with the new Bertelsmann Music Group.Sonopress, a company established in 1958 to manufacture records, was not part of the Bertelsmann Music Group, rather it was assigned to the print and industrial division. With Doubleday, another well-known publishing house was acquired. As a result, the group ascended to become a well-known international company, and Bertelsmann was temporarily the world's largest media group.
In the financial year of 1990/1991, Bertelsmann had over 45,000 employees and reached sales of 14.5 billion Deutsche Mark annually. 63% involved business outside of Germany, and the United States was the most important foreign market. After the German reunification and the end of the Cold War, Bertelsmann also expanded to East Germany, as well as into Central and Eastern Europe. For example, in 1989 the first branch outlet of the Club Bertelsmann opened in Dresden. The later development of Bertelsmann in the 1990s was marked by the spread of the Internet as a mass medium, as well as changes to the ownership structure. In 1993, Reinhard Mohn transferred the majority of capital shares to the Bertelsmann Stiftung and assumed its chairmanship. The foundation itself was financed by profits of the company.
In 1994, Gruner + Jahr acquired the magazines of The New York Times, whereby Bertelsmann was once again able to expand its presence in foreign markets. From 1995, there was a new business division of multimedia at Bertelsmann. Its centerpiece was AOL Europe, a joint venture of America Online and Bertelsmann. Prior to that, Bertelsmann had already acquired a direct share in America Online. The multimedia division also included mediaWays and Pixelpark. In 1997, UFA merged with Compagnie Luxembourgeoise de Télédiffusion (CLT) to become a joint entertainment group based in Luxembourg. With CLT-UFA, Bertelsmann was able to decisively diversify its business. In 1998, Thomas Middelhoff succeeded Mark Wössner as Bertelsmann's chairman and chief executive officer. Thomas Middelhoff had previously already been a member of the management board of the multimedia division. Mark Wössner joined the supervisory board of the company and also became chairman of the Bertelsmann Stiftung.
This management change coincided with the takeover of Random House. With this, the group advanced to become the largest publishing group in the English-speaking world. Random House was merged with Bantam Doubleday Dell, and the global headquarters of all Bertelsmann publishing houses were relocated to New York City. In 1999, Bertelsmann acquired the publisher Springer Science+Business Media, which, among other things, was the market leader for mathematics and physics. In the year 2000, Bertelsmann dissolved its joint venture with AOL Europe. The sale of the shares in the joint venture to America Online yielded billions to Bertelsmann. In the same year, Bertelsmann and Pearson formed the RTL Group from their TV subsidiaries. Bertelsmann initially owned a minority in the company, and gradually built up its share. Later, Bertelsmann secured the majority of the shares in RTL through a share swap with the Groupe Bruxelles Lambert (GBL), which as a result owned 25.1% of Bertelsmann.
2001 to 2007
Under the leadership of Thomas Middelhoff, Bertelsmann increased its involvement in the Internet, whereby above all the investment in Napster received major media attention. The aim of the acquisition, among other things, was to stem the illegal spread of copyrighted material. In 2001, the service nonetheless had to be shut down due to legal disputes. Bertelsmann faced several claims for damages by the music industry. In order to finance additional growth of Bertelsmann, Thomas Middelhoff raised the idea of going public, which led to fundamental disagreement with the Mohn family. In 2002, Gunter Thielen became the new chairman and chief executive officer of Bertelsmann, and some members of the media viewed the change critically.
A consolidation phase followed, in order to solve the problems with the core business. For example, Bertelsmann sold unprofitable e-commerce firms like the online shop of Barnes & Noble, among others. Gruner + Jahr sold the Berliner Zeitung, and the scientific publisher, BertelsmannSpringer, was spun off. In the 2003 financial year, Bertelsmann announced that it was investing its music business in a joint venture with Sony. Bertelsmann and Sony each owned half the shares. With this transaction, the stakeholders sought to respond to declining sales in the music market. In addition, Gunter Thielen initiated the buyback of the shares from Groupe Bruxelles Lambert, so that the Mohn family regained complete control of Bertelsmann from 2006. This measure was also financed with the sale of the music rights business to Vivendi. During the tenure of Gunter Thielen, the number of employees at Bertelsmann exceeded 100,000 for the first time.
In 2013, Bertelsmann floated part of its shares in the RTL Group on the stock exchange, in order to finance additional growth from the proceeds of the sale. In the year 2013, Penguin Random House became the world's largest publishing company.Gruner + Jahr was taken over completely by Bertelsmann in 2014. Furthermore, under the leadership of Thomas Rabe, Bertelsmann increasingly invested in the education sector: In 2014, for example, Relias Learning was acquired. The company belongs to the Bertelsmann Education Group, established in 2015. The Club Bertelsmann was wound up, and individual distribution partners are taking legal action against it. In 2016, the printing business was bundled in the Bertelsmann Printing Group.
2016 to 2019
Bertelsmann diversified its base in 2016 by introducing a structure consisting of eight divisions. In 2017, Bertelsmann also undertook moves to further strengthen its core business, among other things increasing its share in Penguin Random House from 53 to 75 percent. Through the partial withdrawal of Pearson, Bertelsmann secured a strategic three-quarters majority in the world's leading trade publishing group. Penguin Random House's publications include the memoirs of Michelle and Barack Obama.
Arvato was aligned more closely with the Group through changes in management, among other measures. The heads of the division's individual "Solution Groups" have reported directly to members of the Bertelsmann Executive Board ever since. The company weighed its strategic options for the Customer Relationship Management business, and in 2018 established a CRM company in cooperation with the Saham Group: The new company, Majorel, enjoys a leading market position in Europe, the Middle East and Africa.
The growing education business was strengthened in 2018 through the acquisition of the U.S. provider OnCourse Learning, one of the Group's biggest deals in the U.S. market. OnCourse Learning offers continuing education and professional development by providing digital courses for healthcare and financial services clients. Bertelsmann, itself a strong advocate of lifelong learning, donated tens of thousands of Udacity scholarships in 2017 and 2019 to enable the advanced training of talented participants, in fields including Big Data, cloud computing and artificial intelligence.
In 2019, Bertelsmann also boosted cooperation in the German content market by establishing the Content Alliance, headed up by Julia Jäkel. The key players in this initiative involve the television and radio broadcasting networks of the Mediengruppe RTL Deutschland, UFA TV production company, Random House publishing company, Gruner + Jahr, as well as the BMG music company. The Bertelsmann Content Alliance develops joint formats and delivers a full range of products and services for creative professionals.
The RTL Group is one of the leading European entertainment providers, based in Luxembourg. The company runs a commercial private television and radio channels in several countries, including RTL and VOX in Germany. In 2015, with the RTL Digital Hub, the company launched a dedicated unit for web videos. In addition, production companies, such as Fremantle, are part of the RTL Group. In January 1997, Bertelsmann merged the UFA film and television company with Compagnie Luxembourgeoise de Télédiffusion (CLT). The merger of CLT-UFA with Pearson TV in the year 2000 marked the beginning of the RTL Group. The company is listed on the stock exchange and has been majority-owned by Bertelsmann since 2001. Following the sale of shares in 2013, the stake is 75.1%. In 2019, sales of the RTL Group were EUR6.651 billion.
Penguin Random House
Penguin Random House is the world's largest book publishing company. The company was created in 2013 through the merger of the publishing businesses of Bertelsmann and Pearson. With the acquisition of Random House in 1998, Bertelsmann already became the largest book publisher in the English-speaking world. 250 publishing houses on five continents are part of the company, including Random House and Penguin Books, but also Doubleday, Knopf and Viking. The German Verlagsgruppe Random House (Goldmann, Heyne and others), based in Munich, is not part of Penguin Random House, yet it does belong to the same division at Bertelsmann. Penguin Random House has its main headquarters in the Penguin Random House Tower in New York City. Since 2020, Bertelsmann owns 100% of the company. In 2019, the company achieved sales of EUR3.636 billion.
Gruner + Jahr
Gruner + Jahr is an internationally operating magazine publisher based in Hamburg. Its publications include Brigitte, Geo and Stern, and the company also has a majority stake in Motor Presse Stuttgart and Dresdner Druck- und Verlagshaus. In 2015, Gruner + Jahr had a presence in 20 countries. The businesses in the United States have been sold in the meantime, and in terms of revenue, Germany and France are the most important markets. Bertelsmann has had a stake in Gruner + Jahr since 1969. Bertelsmann gradually purchased shares from Richard Gruner, Gerd Bucerius and John Jahr. In 1976, Bertelsmann held 74.9% of Gruner + Jahr. In 2014, Bertelsmann took over the company completely. In 2019, sales of Gruner + Jahr totaled EUR1.355 billion.
Arvato is an international service provider. In its current form, the company originated in the year 1999. At that time, the print and industry sectors at Bertelsmann were restructured, whereby services received a higher priority than the print and machinery sector back then. Since the 1950s, Bertelsmann has been an active service provider, delivering books for other publishing companies, for example. To this day, Vereinigte Verlagsauslieferung (VVA) has belonged to Arvato. What's more, today Arvato offers services, for example, in the areas of Customer Relationship Management (CRM), Supply Chain Management (SCM) and finance, as well as information technology. The main headquarters of Arvato is Gütersloh, and additional locations exist in 22 countries, including China and the United States. In 2019, sales of Arvato reached a volume of EUR4.175 billion.
Bertelsmann Printing Group
In January 2016, Bertelsmann bundled its printing activities in digital, offset and gravure in the Bertelsmann Printing Group. It is Europe's largest player in the industry. The corporate group is located in Gütersloh. Bertelsmann Printing Group includes not only GGP Media, Mohn Media, Prinovis, Sonopress, Vogel Druck and several other companies, but also Be Printers. Be Printers is in turn a spin-off of Arvato, created in 2012, in order to consolidate the group's printing business. The business has been under pressure for years due to declining print editions. In 2019, the Bertelsmann Printing Group achieved sales of EUR1.568 billion.
The Bertelsmann Investments division bundles Bertelsmann's startup investments. Bertelsmann Digital Media Investments is based in Gütersloh and since 2014 has concentrated mainly on the United States. With Bertelsmann Asia Investments,Bertelsmann Brazil Investments and Bertelsmann India Investments, three additional funds exist that are active in the growth regions defined by the holding. Bertelsmann Investments holds equity positions in a total of over 100 startup companies, almost all from the digital economy. In 2019, sales reached EUR13 million.
The new legal entity does not change any of the ownership of Bertelsmann. As early as the 1970s and 1980s, the Mohn family built up the Bertelsmann Stiftung, which has owned the majority of shares in Bertelsmann since 1993. In addition to social responsibility, tax considerations played a role in this. Moreover, this strategy was intended to preserve the continuity of the company. Today, according to Bertelsmann, the Mohn family holds 19.1% of the shares. The three foundations, Bertelsmann Stiftung, Reinhard Mohn Stiftung and BVG Stiftung, together own 80.9%. The Bertelsmann Verwaltungsgesellschaft mbH (BVG) has key influence on the whole group: It bundles all the voting rights of the Mohn family and foundations with ownership shares. Together, they own 100 percent in the general assemblies of the group company (Bertelsmann SE & Co. KGaA) and its general partner (Bertelsmann Management SE).
Bertelsmann SE & Co. KGaA is managed by the Bertelsmann Management SE. The chairman of the executive board of Bertelsmann Management SE is Thomas Rabe. Other members of the executive board include Markus Dohle, Immanuel Hermreck, Bernd Hirsch and Anke Schäferkordt. In 2012, Bertelsmann created the additional so-called Group Management Committee, in order to advise the executive board in important matters. Some members of the media noted that a relatively large number of women have been appointed to the Group Management Committee. Bertelsmann SE & Co. KGaA and Bertelsmann Management SE each have a supervisory board that oversees the management. In 2013, Christoph Mohn assumed the chairmanship of both bodies. From the family, Liz Mohn and Brigitte Mohn are also members of the supervisory boards of both companies.
Since the 1970s, the Bertelsmann headquarters have been in the Gütersloh district of Avenwedde, and its layout encompasses some 26,100 square meters. The office buildings were erected in 1976 and expanded in 1990. In addition to the typical facilities, the headquarters in Gütersloh also feature the Bertelsmann University, an academic institution for Bertelsmann executives. In 1992, Bertelsmann purchased the Bertelsmann Building in New York City and located its North American headquarters there. The building was re-sold in 2004. The Berlin representative office was opened in 2003 in the Kommandantenhaus in the historic center of Berlin. As part of international activities, Bertelsmann established additional locations at the corporate level (Corporate Centers) in Beijing (2006), New Delhi (2012) and São Paulo (2012).
Worldwide, with all divisions, Bertelsmann has almost 350 locations. The majority are in Europe, where the group earns the largest share of its revenues. Over the past years, the group has increasingly focused on the newly industrialized nations of Brazil, China and India. In Brazil, efforts have been aimed at expanding activities above all in the field of education. Bertelsmann has already been involved in China since 1992, and today all divisions are represented there. In India, Bertelsmann is focused on growth in the e-commerce sector, among others.
In the 1990s, critical questions arose as to the role of Bertelsmann in the Third Reich. It was precipitated by a speech given by the chairman and chief executive officer, Thomas Middelhoff, on the occasion of his receiving the Vernon A. Walters Award 1998 in New York City. Thomas Middelhoff portrayed Bertelsmann as one of the few non-Jewish media companies shut down by the National Socialists because it allegedly published subversive literature. This interpretation was severely criticized, for example, by publicist Hersch Fischler. The speech led to a broad public debate and ultimately in 1998 to the establishment of an independent historical commission (IHC) by the group. This was headed by Saul Friedländer, and additional members were Norbert Frei, Trutz Rendtorff and Reinhard Wittmann. The IHC presented an interim report in the year 2000 and issued a final report in 2002. It stated, for example, that the suggestion that the C. Bertelsmann Verlag mounted resistance against National Socialism was clearly not accurate. The company's "shut-down as a publisher of the resistance" could not be proven. Historian Volker Ullrich proclaimed in the weekly Die Zeit that the notion of the company's being "a resistance publisher" was clearly baseless. The files of the IHC have been publicly available in the company archives of Bertelsmann in Gütersloh since 2003. In October 2002 the Bertelsmann conglomerate publicly expressed regret for its "conduct under the Nazis, and for later efforts to cover it up".
Profits plummeted after 2006, and declined further over 2007 and 2008; 2009 was a loss making year. Profits recovered to some extent across the next five years but remained weak until 2015. The subsequent purchase of approximately fifty per cent of Penguin Random House in two separate deals of 2017 and 2019, after Penguin Random House had only recently achieved record revenue and sales (more than twice as much as 2011, ), must be called into question.
^"Literaturnobelpreis am Donnerstag". Der Standard (in German). 9 October 2002. p. 26.
^Norbert Frei; Saul Friedländer; Trutz Rendtorff; Reinhard Wittmann (2002). Bertelsmann im Dritten Reich (in German). Munich: Bertelsmann. p. 503. ISBN3-570-00711-1.
^"Bücher im Dienst der Kriegspropaganda". Berliner Zeitung (in German). 8 October 2002. p. 14.
^"Bertelsmann-Chef zeigt Reue". Handelsblatt (in German). 8 October 2002. p. 18.
^Thomas Schuler (31 October 2008). "Die Gabe des Vergessens". Neue Zürcher Zeitung (in German). p. 63.
^175 Years of Bertelsmann: The Legacy for Our Future. Munich: C. Bertelsmann. 2010. p. 22. ISBN978-3-570-10175-9.
^Thomas Lehning (2004). Das Medienhaus: Geschichte und Gegenwart des Bertelsmann-Konzerns (in German). Paderborn, Munich: Fink. p. 33. ISBN3-7705-4035-2.
^Thomas Lehning (2004). Das Medienhaus: Geschichte und Gegenwart des Bertelsmann-Konzerns (in German). Paderborn, Munich: Fink. p. 34. ISBN3-7705-4035-2.
^175 Years of Bertelsmann: The Legacy for Our Future. Munich: C. Bertelsmann. 2010. p. 135. ISBN978-3-570-10175-9.
^Günther Bähr (14 August 2015). "Das allerletzte Kapitel". Focus (in German). pp. 96-97.
^Erich Reimann (25 August 2015). "Letztes Kapitel vor Gericht". Wiesbadener Kurier (in German).
^Volker Ackermann; Torsten Groth; Markus Plate; Arist von Schlippe (2011). Große deutsche Familienunternehmen: Generationenfolge, Familienstrategie und Unternehmensentwicklung (in German). Göttingen: Vandenhoeck & Ruprecht. p. 82. ISBN978-3-525-40338-9.
^Thomas Lehning (2004). Das Medienhaus: Geschichte und Gegenwart des Bertelsmann-Konzerns (in German). Paderborn, Munich: Fink. p. 87. ISBN3-7705-4035-2.
^"Bertelsmann wird heute 175 Jahre alt (1950-1960)". Westfalen-Blatt (in German). 1 July 2010.
^"Superstar und Freund der Mohns". Neue Westfälische (in German). 23 December 2014. p. 3.