Primedia buys Emap unit

July 2, 2001 Posted: 0730 GMT

LONDON (CNN) -- UK media company Emap said on Monday it had agreed to sell its American magazines business to Primedia of the U.S. for $515 million.

Emap bought its U.S. unit, formerly known as Petersen Publishing, for $1.5 billion in 1999, but the business has struggled. Emap said the sale does not include the U.S. edition of its FHM men's lifetstyle magazine.

Emap's foray into the U.S. cost chief executive Kevin Hand his job in May when the company announced a pretax loss of £527 million ($740 million) because of the U.S. business.

"The impending sale, of what was the old Petersen business, closes a difficult and unhappy chapter in Emap's history," said new Chief Executive Robin Miller in a statement announcing the deal.

New York-based Primedia (PRM: Research, Estimates), which publishes magazines such as Seventeen, Modern Bride and American Baby,  is buying the ninth-largest publisher of magazines in the U.S., with more than 60 titles as well as related cable television programming and Web sites.

In the year to March 31, Emap said its U.S. business posted an operating profit of $54 million on sales of $362 million.

Emap's Miller, explaining the company's exit from the U.S., said: "As a specialist consumer magazine publisher with approximately 3 percent of the U.S. market, Emap USA has been increasingly disadvantaged in terms of its position with wholesalers and the retail trade."

Emap will retain a foothold in the U.S., however, with its flagship FHM magazine. The title has average U.S. sales of more than 500,000 per edition.

The U.K. publisher said it will now concentrate on developing its core magazine and radio businesses in both Britain and France.

Emap (EMA) shares were up 1.3 percent to 715 pence in London after the deal was announced.

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