New York, NY – The overhaul of VNU shifted into high gear on December 18th with three major announcements. VNU reported a new organizational structure that takes effect on January 1 and announced its intention to sell nearly all the assets of its VNU Business Media Europe (BME) unit to 3i, Europe’s leading private equity company. VNU also said it would permanently reduce its cost base by 10 percent over the course of 2007 through “organizational de-layering” and real estate and IT consolidation.
None of VNU’s U.S. Shows Included in Planned Sale to 3i
VNU’s planned exhibition divestiture involved only a pair of relatively small European trade show operations – BIAS Group based in Italy and VNU Exhibitions UK in Great Britain. The proposed sale of BME’s business in France is still under discussion. The larger VNU Exhibitions Europe, a joint venture with Jaarbeurs that is based the Netherlands and has a presence in China, was not included in the sale nor were any U.S. events.
Netherlands-based 3i did not appear to be planning to establish itself as a player in the European exhibition market. The firm said it was focused on improving BME’s online presence in recruitment and its 70 print titles.
“As part of our Dutch media focus, we identified BME as a prime asset in the Dutch recruitment space with market-leading titles such as Imtermediair and National Vacaturebank,” said 3i partner Mark Redman. “3i will give BME the firepower it needs to take advantage of the expected continued transfer to online, as well as further developing its compelling print offering.”
Terms of the transaction, which was expected to close after February, were not announced. The proposed acquisition includes BME’s operations in The Netherlands, the United Kingdom, Belgium, Germany, Italy and Spain.
VNU has been changing its internal operations since company was sold in May 2006 to the buyout group Valcon Acquisition for $10 billion.
The sale of BME was announced on the same day that VNU said it was embarked on a plan to cut its operating costs permanently by 10 percent over the course of 2007; a plan that includes eliminating up to 4,000 jobs.
It was not specified where the cuts would be made or how many of the jobs would be eliminated through attrition and how many through pink slips. VNU, which employed about 42,000 worldwide, said the reductions would be in “non-client-facing activities.”
Most of the cost savings, according to CEO David Calhoun, would through a streamlining of the overall organization as well as consolidation in real estate and IT operations. “The strategy…gives us the flexibility and speed we need to respond to evolving market imperatives and access more of the resources we need to continue investing aggressively for the future,” Calhoun said.
The announcement came after VNU recently said it would reorganize the VNU Business Media unit run by Robert Krakoff into six market-focused groups: Retail, Marketing, Film, Music, Residential & Commercial Building Design, and Marketing Services & Travel. VNU Business Media runs the company’s U.S. trade shows.
The reorganization continued with the announced appointment of Susan Whiting as executive vice president for the entire company effective January 1. She currently is president and CEO of Nielsen Media Research and will become chairman of the group.
Whiting’s primary duty will be to identify and fast-track development of new products. She, like Krakoff, will report directly to Calhoun.
Reach David Calhoun at (646) 654 5000; Mark Redman at 0031 / 20 3057444 or firstname.lastname@example.org; Susan Whiting at (646) 654-8300 or email@example.com; Robert Krakoff at (646) 654-4500 or BKrakoff@vnubusinessmedia.com