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Axel Springer and KKR near deal on $13.5bn break-up

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Axel Springer and KKR near deal on .5bn break-up

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German billionaire Mathias Döpfner and KKR are nearing a deal to split up the media giant Axel Springer, in a move that would allow one of the world’s largest private equity firms to bow out of news media after five turbulent years. 

The two sides are expected to discuss the proposed structure of a deal that would give KKR majority control of the company’s profitable classifieds business at a meeting of its supervisory board on Thursday, according to four people familiar with the matter.

The deal — which values the whole company at €13.5bn, including more than €10bn for the classifieds business — has already been discussed several times at previous board meetings, two of the people said.

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The Financial Times first reported the pair were in talks about a split in July.

A deal would enable Döpfner, who has served as CEO since 2002, to cement his control over the company’s media outlets. They include the US news sites Politico and Business Insider as well as the German tabloid Bild and its broadsheet sister Die Welt.

Döpfner is expected to keep a minority stake in the classifieds division, which includes jobs platform StepStone and real estate advertising unit Aviv. So too is Friede Springer, the company’s vice-chair and widow of its founder.

The break-up of Axel Springer would mark a new chapter in a five-year partnership in which KKR took the company private in 2019 in a deal that valued the publisher at €6.7bn. Together with the Canada Pension Plan Investment Board (CPPIB), it owns a 48.5 per cent stake in the Berlin-based business.

KKR would gain greater control over the classifieds unit, paving the way for the New York-based firm to exit its investment. It had previously hoped to launch an initial public offering for StepStone, securing a valuation of as much as €7bn, but that plan has been repeatedly postponed after a slump in European listings.

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The split would also free KKR and CPPIB from the succession of controversies that have plagued Axel Springer’s news business. These include allegations of sexual harassment by a former editor of Bild and accusations of editorial interference by Döpfner.

Most recently, KKR was dragged into a bitter row between the hedge fund boss Bill Ackman and Business Insider after it published claims of plagiarism against his wife.

The break-up comes as 61-year-old Döpfner, who sits on the boards of Netflix and Warner Music Group and has forged a friendship with Elon Musk, seeks to expand his footprint in the English-language media market, particularly in the US. 

He unsuccessfully tried to buy the Financial Times in 2015, instead buying Business Insider later the same year. In 2021, he acquired Politico for a price tag of around $1bn.

Axel Springer and KKR declined to comment.

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NATO military committee chair, others back Ukraine's use of long range weapons to hit Russia

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NATO military committee chair, others back Ukraine's use of long range weapons to hit Russia

PRAGUE (AP) — The head of NATO’s military committee said Saturday that Ukraine has the solid legal and military right to strike deep inside Russia to gain combat advantage — reflecting the beliefs of a number of U.S. allies — even as the Biden administration balks at allowing Kyiv to do so using American-made weapons.

“Every nation that is attacked has the right to defend itself. And that right doesn’t stop at the border of your own nation,” said Adm. Rob Bauer, speaking at the close of the committee’s annual meeting, also attended by U.S. Gen. CQ Brown, chairman of the Joint Chiefs of Staff.

Bauer, of Netherlands, also added that nations have the sovereign right to put limits on the weapons they send to Ukraine. But, standing next to him at a press briefing, Lt. Gen. Karel Řehka, chief of the General Staff of the Czech Armed Forces, made it clear his nation places no such weapons restrictions on Kyiv.

“We believe that the Ukrainians should decide themselves how to use it,” Řehka said.

Their comments came as U.S. President Joe Biden is weighing whether to allow Ukraine to use American-provided long-range weapons to hit deep into Russia. And they hint at the divisions over the issue.

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Biden met with British Prime Minister Keir Starmer on Friday, after this week’s visit to Kyiv by their top diplomats, who came under fresh pressure to loosen weapons restrictions. U.S. officials familiar with discussions said they believed Starmer was seeking Biden’s approval to allow Ukraine to use British Storm Shadow missiles for expanded strikes in Russia.

Biden’s approval may be needed because Storm Shadow components are made in the U.S. The officials, who spoke on condition of anonymity to share the status of private conversations, said they believed Biden would be amenable, but there has been no decision announced yet.

Providing additional support and training for Ukraine was a key topic at the NATO chiefs’ meeting, but it wasn’t clear Saturday if the debate over the U.S. restrictions was discussed.

Many of the European nations have been vigorously supportive of Ukraine in part because they worry about being the next victim of an empowered Russia.

At the opening of the meeting, Czech Republic President Petr Pavel broadly urged the military chiefs gathered in the room to be ”bold and open in articulating your assessments and recommendations. The rounder and the softer they are, the less they will be understood by the political level.”

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The allies, he said, must “take the right steps and the right decisions to protect our countries and our way of life.”

The military leaders routinely develop plans and recommendations that are then sent to the civilian NATO defense secretaries for discussion and then on to the nations’ leaders in the alliance.

The U.S. allows Ukraine to use American-provided weapons in cross-border strikes to counter attacks by Russian forces. But it doesn’t allow Kyiv to fire long-range missiles, such as the ATACMS, deep into Russia. The U.S. has argued that Ukraine has drones that can strike far and should use ATACMS judiciously because they only have a limited number.

Ukraine has increased its pleas with Washington to lift the restrictions, particularly as winter looms and Kyiv worries about Russian gains during the colder months.

“You want to weaken the enemy that attacks you in order to not only fight the arrows that come your way, but also attack the archer that is, as we see, very often operating from Russia proper into Ukraine,” said Bauer. “So militarily, there’s a good reason to do that, to weaken the enemy, to weaken its logistic lines, fuel, ammunition that comes to the front. That is what you want to stop, if at all possible.”

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Brown, for his part, told reporters traveling with him to the meeting that the U.S. policy on long-range weapons remains in place.

But, he added, “by the same token, what we want to do is — regardless of that policy — we want to continue to make Ukraine successful with the capabilities that have been provided” by the U.S. and other nations in the coalition, as well as the weapons Kyiv has been able to build itself.

“They’ve proven themselves fairly effective in building out uncrewed aerial vehicles, in building out drones,” Brown told reporters traveling with him to meetings in Europe.

Defense Secretary Lloyd Austin has made similar points, arguing that one weapons system won’t determine success in the war.

“There are a number of things that go into the overall equation as to whether or not you know you want to provide one capability or another,” Austin said Friday. “There is no silver bullet when it comes to things like this.”

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He also noted that Ukraine has already been able to strike inside Russia with its own internally produced systems, including drones.

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Video: Secret Tapes Reveal Nixon’s Views on Marijuana

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Video: Secret Tapes Reveal Nixon’s Views on Marijuana

Two years after launching the war on drugs, President Richard Nixon made a startling admission during a meeting in the Oval Office. He said that marijuana was “not particularly dangerous.” The remarks, captured by the former president’s secret recording system, bolster the notion that the criminalization of marijuana was driven by politics. Ernesto Londoño, a New York Times reporter who covers drug use and counternarcotics policy, explains.

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F1’s master of aerodynamics Adrian Newey puts his reputation on the line

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F1’s master of aerodynamics Adrian Newey puts his reputation on the line

During a career spanning more than 40 years and 25 world championships, Formula One engineer Adrian Newey has shown his talent for turning “mad ideas into reality” in building elite racing cars.

In a sport known for technical precision, Newey’s approach has been to repeatedly ask the same four questions. “How can we increase performance? How can we improve efficiency? How can we do this differently? How can I do this better?” he wrote in his 2017 memoir.

A master of aerodynamics, Newey is a rare car designer celebrated in a sport where gladiatorial drivers dominate screen time. When the 65-year-old revealed his intention to leave reigning champions Red Bull this year, the speculation quickly went into overdrive. However, nobody thought retirement would appeal to a man once described by F1 legend Frank Williams as “more competitive than his drivers”.

In joining the Aston Martin F1 team as its managing technical partner, Newey is putting his reputation back on the line. All eyes are on whether he can repeat his success at a fourth team and to further justify his status as an industry legend as well as his annual pay package north of £20mn.

“He had alternatives. He could be sailing. He has taken the opportunity to join with Lawrence Stroll to try and repeat [his success],” said Eddie Jordan, the former F1 team owner and Newey’s manager. 

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Adrian Newey, left, with Christian Horner, who was accused of inappropriate behaviour earlier this year but cleared after an investigation © Mark Thompson/Getty Images

By hiring Newey, billionaire Stroll has signalled his determination to win championships in historical British racing green.

“I can tell you, Adrian is a bargain,” Stroll said. “I’ve been in business for over 40 years now, and I’ve never been more certain. It’s not an investment. He’s a shareholder and a partner.”

Newey, who will officially start at Aston Martin next year, has also been given some equity in the F1 team in a move that he describes as having “skin in the game”.

However, his price tag, which is more than what many drivers and even some top football players earn, has raised eyebrows among some F1 insiders. Others question his recent contribution to the Red Bull’s recent success, pointing to the strength of the team, including its technical director Pierre Waché.

The matter of credit for Red Bull’s success reared its head last year, when Newey’s wife Amanda posted: “What a load of hogwash” on social media in response to an article in industry publication Motorsport that touched on how Red Bull’s technical prowess had evolved.

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Growing up in Stratford-upon-Avon, Newey picked up a passion for four wheels — and engineering — from his veterinarian father, who worked on cars in his garage. Newey would sketch out his own race car designs. By 12 he knew he wanted to design race cars for a living.

Mechanics work on the car of Aston Martin’s Spanish driver Fernando Alonso at the Singapore Grand Prix last year
Mechanics work on the car of Aston Martin’s Spanish driver Fernando Alonso at the Singapore Grand Prix last year © Caroline Chia/Pool/AFP via Getty Images

Attracted by a wind tunnel used by F1 teams, he studied aeronautics at the University of Southampton, reasoning that race cars are more like aircraft.

Newey was a pivotal influence as the sport embraced the importance of aerodynamics in performance, with the “downforce”, the vertical air that pushes cars downwards, increasing grip and speed around corners.

He wrote his name into F1 lore at Williams and McLaren for his role in championship-winning cars in the 1990s. He also experienced tragedy with the crash that resulted in the death of legendary Brazilian driver Ayrton Senna in a Williams car in 1994.

Newey was hired by the late Dietrich Mateschitz, billionaire co-founder of Red Bull from McLaren soon after he bought the old Jaguar F1 team in 2004. The team went on to win both championships — drivers and constructors — four years running from 2010 to 2013. 

After seven years of Mercedes domination, Red Bull returned to the front of the grid in 2021, when Max Verstappen controversially won the drivers’ championship from Lewis Hamilton. The team’s RB19 last year was one of the most dominant F1 cars ever, winning 21 of 22 races.

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Newey’s potential at Aston Martin is not the only reason the sport has been gripped by his move. F1 supporters will also be watching how Red Bull will adjust following disruption this year when a female employee accused team boss Christian Horner of inappropriate behaviour. Horner denied the allegations and was cleared after an investigation.

The engineer, who still uses a pencil to sketch instead of a computer, will lead Aston Martin’s drivers — double world champion Fernando Alonso and Stroll’s son Lance — in turning a middling outfit into champions. Since Stroll rebranded the team, Aston Martin has finished seventh, seventh and fifth in the championship.

He will also need to tackle the next F1 regulatory overhaul in 2026, which requires the construction of an all-new generation of F1 car, more agile with revamped aerodynamics.

The designer will have the freedom of a newly built F1 factory and wind tunnel. Honda, which helped to drive Red Bull’s recent championships, has signed up to supply the engine.

Damon Hill, who drove a Newey-designed Williams to championship victory in 1996, says the designer has a special understanding of what drivers need.

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“He understands the car is a tool for the driver and it’s no good creating a beast nobody can drive,” Hill told the Financial Times. “He actually understands your bum is in that seat and if it spooks you, it’s not going to be good.”

While Hill likens F1 to an “unexploded bomb” that can “explode in your face”, he says Newey’s experience means he is ready. “If he can’t get [Aston Martin] out of the midfield to the front end, I’d be astonished,” he said.

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