Axel Springer backs out of Dogan Yayin deal
BERLIN — German publishing giant Axel Springer has backed out of a deal to buy a 29% stake in Turkish group Dogan Yayin due to an ongoing tax dispute between the media company and the Turkish government over a potentially crippling $3.3 billion fine.
Springer said on Wednesday that Dogan Yayin, Turkey’s largest media conglom, had failed to resolve the issue — one of the conditions of the deal — but added that it could reconsider the purchase once the dispute is settled.
Springer already owns 25% of Dogan subsidiary Dogan TV, a stake it acquired in 2006 in a deal that has also factored in the ongoing tax row.
Critics have accused the Turkish government of trying to destroy Dogan Yayin, which controls seven newspapers, 28 magazines and three television channels — including Turkey’s version of CNN.
The fine followed a row between Prime Minister Recep Tayyip Erdogan and Aydin Dogan, the group’s billionaire owner, over critical coverage of the pro-Islamic government, including allegations of corruption and reports about an Islamic charity that may have illegally funneled money to Erdogan’s ruling AK Party.
In February, Turkish tax authorities fined the company more than $600 million in connection with the Dogan TV stake sale to Springer. Since then, the government has leveled additional fines based on questionable audits of past filings totaling some $3.3 billion — a sum greater than the conglom’s total value.