Retreat!

5 August 2008 By Una Galani Follow @ugalani

Exactly four years after forming the disastrous music joint venture, the German media group is selling its 50% stake to partner Sony for just $900m. That will bring Bertelsmann out of debt, but the unimpressive valuation should alarm some more richly valued rivals.

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Bertelsmann on Tuesday agreed to sell its 50% stake in Sony BMG music unit to joint venture partner Japanese electronics giant Sony Corporation.

An SEC filing showed Bertelsmann will receive a total $1.2bn from the transaction, which includes $900m for its share of the joint venture, plus $300m of its share of cash on the Sony BMG balance sheet.

The German media group said in March that it was reviewing options for its slowgrowth or unprofitable businesses, specifically Sony BMG and Direct Group, which it sold part of last month.

Two years ago Bertelsmann agreed to pay E4.5bn to buyout the 25% shareholding of its sole outsider shareholder Groupe Bruxelles Lambert.

Bertelsmann's other holdings include European broadcaster RTL Group, USbased book publisher Random House, European magazine publisher Gruner + Jahr and Arvato, a mediaservices unit.

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