1.8 Major contracts AFR

1.8.1 MAJOR CONTRACTS BINDING THE GROUP

In the two years immediately preceding publication of this Universal Registration Document, the Company signed the following major contracts (other than those entered into in the normal course of business):

DISPOSAL OF THE HEADQUARTERS OF EUROPE 1
On 23 May 2018, the Lagardère group sold the headquarters of French radio station Europe 1, located in rue François 1er in central Paris, to the Ardian Real Estate group. Four-fifths of the €253 million sale price was paid over on the signing date of the final deed of sale; the balance was paid at the end of 2018.

SALE OF RADIO BUSINESSES IN THE CZECH REPUBLIC, POLAND, SLOVAKIA AND ROMANIA
On 17 April 2018, the Lagardère group announced the sale of its Radio assets in the Czech Republic, Poland, Slovakia and Romania to the Czech Media Invest group.
The sale price was €73 million for consolidated revenue of around €56 million in 2017.
Further to the lifting of all of the conditions precedent on 19 July 2018 (mainly concerning clearance from the local regulatory authorities in the countries concerned), the transaction closed on 26 July 2018.

SALE OF ITS MAGAZINE PUBLISHING TITLES IN FRANCE TO THE CZECH MEDIA INVEST GROUP
On 18 April 2018, the Lagardère group announced that it had entered into exclusive negotiations with Czech Media Invest with a view to selling certain magazine titles in France, namely Elle and its various extensions, including the online presence of Elle in France, Version Femina, Art & Décoration, Télé 7 Jours and its various extensions, France Dimanche, Ici Paris and Public.
Following the signing of an agreement on 26 July 2018 and the approval of the competition authorities, the transaction closed on 14 February 2019.
In connection with the sale, CMI was granted an exclusive license for the Elle brand covering France. The Lagardère group remains the owner of the Elle brand in France and internationally.
The amount of the transaction was €52 million. Six hundred and forty-nine employees were transferred to CMI as part of the deal.

DISPOSAL OF THE E-HEALTH BUSINESS
The Group sold its e-Health business on the basis of an aggregate enterprise value of €60 million for 100%, via the following transactions:

  • MonDocteur, the online medical appointment platform, was sold on 10 July 2018 to Doctolib, which thereby consolidated its position as the leading e-Health business in Europe;
  • Doctissimo, a leader in health and wellness information, was sold to the TF1 group on 10 October 2018.

ACQUISITION BY LAGARDÈRE TRAVEL RETAIL OF THE HOJEIJ BRANDED FOODS (HBF) GROUP, A LEADING FOODSERVICE OPERATOR IN TRAVEL RETAIL IN NORTH AMERICA
On 20 November 2018, Lagardère Travel Retail finalised the acquisition of Hojeij Branded Food (and its subsidiary Vino Volo), a leading Foodservice operator in the Travel Retail market in North America.
Announced on 15 August 2018, the acquisition is aligned with Lagardère Travel Retail’s commitment to strengthening its leadership in the airport Foodservice segment in North America. The consolidation of HBF and Vino Volo has created the third-largest player in the North American Travel Retail and Foodservice market. HBF has been consolidated in Lagardère’s financial statements since 1 December 2018.
The acquisition was valued at USD 330 million on a cash-free and debt-free basis, net of the partners’ share in operating joint ventures (ACDBE programmes) estimated at 16% over the period of the business plan.

SALE OF THE BOURSIER.COM BUSINESS TO THE LES ÉCHOS-LE PARISIEN GROUP
On 31 January 2019, Lagardère sold the Boursier.com website, its financial markets information and publishing activities, previously held by Lagardère Active subsidiary Newsweb, to the Les Échos-Le Parisien group.

SALE OF THE JACARANDA RADIO STATION AND MEDIAMARK ADVERTISING SALES BROKERAGE TO SOUTH AFRICAN GROUP KAGISO MEDIA
Lagardère announced the completion of the following transactions for the disposal by Lagardère Active Radio International (LARI) of its businesses in South Africa to long-standing fellow shareholder, the Kagiso Media group:

  • the disposal on 7 February 2019 of the 20% interest in Jacaranda FM Proprietary Limited, owner of Jacaranda FM, South Africa’s number 1 private radio station. The sale price was ZAR 233 million (just over €15 million);
  • the signing of an agreement on 29 January 2019 for the sale of the 49.99% interest in the Mediamark Proprietary Limited advertising sales brokerage. Further to the lifting of all conditions precedent (mainly concerning clearance from the South African regulatory authorities), the transaction closed on 30 September 2019. The sale price is estimated at ZAR 30 million (around €2 million).

SALE OF BILLETREDUC.COM TO THE FNAC DARTY GROUP
On 28 February 2019 the Lagardère group sold BilletReduc.com to the Fnac Darty group through its France Billet subsidiary. Lagardère and Fnac Darty had announced exclusive negotiations for the sale of BilletReduc.com on 17 January 2019.

SALE OF PLURIMEDIA TO MEDIA PRESS GROUP
On 28 February 2019 the Lagardère group sold Plurimedia to Media Press Group.

SALE OF THE TELEVISION BUSINESS (EXCLUDING MEZZO) TO THE M6 GROUP
On 24 May 2019, Lagardère and the M6 group signed the sale agreement for the Lagardère group’s Television business (excluding Mezzo). The business includes Gulli and its international extensions, Canal J, TiJi, Elle Girl TV, MCM, MCM Top, RFM TV, and the related advertising sales brokerages.
Following approval by the French broadcasting authority (CSA) and the country’s competition authorities, the transaction closed on 2 September 2019, for a transaction price of €215 million (enterprise value).

SALE OF MEZZO TO THE LES ÉCHOSLE PARISIEN AND CANAL+ GROUPS
On 17 July 2019, the Lagardère group, together with France Télévisions, sold its stake in Mezzo to the Les Échos-Le Parisien and Canal+ groups.

ACQUISITION BY LAGARDÈRE TRAVEL RETAIL OF INTERNATIONAL DUTY FREE (IDF), BELGIUM’S LEADING TRAVEL RETAIL OPERATOR
On 19 September 2019, Lagardère Travel Retail completed the acquisition of International Duty Free (IDF), the travel retail market leader in Belgium, which also has operations in Luxembourg and Kenya.
Announced on 25 July 2019, this acquisition cements Lagardère Travel Retail’s position as the world’s third-largest operator of Duty Free airport points of sale and as the European leader in Travel Retail, raising its annual revenue to €5.3 billion(1). It also enables Lagardère Travel Retail to extend its presence to a major new European hub, Brussels, with high-quality operations, while consolidating its positions in Luxembourg and in Africa with entry into Kenya. Lagardère Travel Retail will also be able to capitalise on IDF’s experience in the expanding premium Belgian chocolate segment to strengthen its international operations in this category. The acquisition was valued at €250 million(2), or around 8x IDF’s pro forma EBITDA(3) for 2020, factoring in €7 million in recurring synergies expected to be unlocked through to 2022.

SALE OF LAGARDÈRE SPORTS TO H.I.G. CAPITAL
On 16 December 2019, the Lagardère group announced that it had received an offer from H.I.G. Capital for a 75% stake in Lagardère Sports, which values the business alone at some €110 million(4) and the entire Lagardère Sports and Entertainment division at around €150 million(5). This valuation does not include the future value creation potential of the Group’s residual 25% interest in Lagardère Sports, or any potential gains from the Confederation of African Football (CAF) agreement.The closing of this transaction is now subject only to clearance from the competition authorities.

(1) Based on 100% of 2018 revenue, including the pro forma contribution of HBF on a full-year basis, which would translate into consolidated proforma revenue of €4.1 billion.
(2) Enterprise value based on zero cash and debt.
(3) Pro forma EBITDA corresponds to estimated budgeted EBITDA for 2020 (first year of operation), plus recurring run-rate synergies of €7 million.
(4) The enterprise value breaks down as €55 million in net investment income payable subject to various time scales and conditions, and €55 million in liabilities (pension obligations and non-controlling interests). The estimated €55 million impact on net cash breaks down as: (i) €22.5 million receivable on the closing of the transaction; (ii) €63 million in the form of a vendor loan reimbursable in line with cash receipts from the Asian Football Confederation (AFC); (iii) €35 million in the form of a vendor loan reimbursable on 31 December 2025 (or earlier, in the event of a change of control); and (iv) €(66) million in cash deconsolidated, as estimated for the expected closing date of the transaction.
(5) The Lagardère group will retain its entire interest in Lagardère Live Entertainment, valued in its financial statements at just over €40 million.

1.8.2 CONTRACTS INVOLVING MAJOR COMMITMENTS FOR THE WHOLE GROUP

Lagardère and/or its subsidiaries have also entered into a certain number of major contracts (other than those entered into in the normal course of business) involving an obligation or major commitment for the whole Group. The contracts concerned are the financing contracts referred to in chapter 5, note 27 to the 2019 consolidated financial statements, particularly the following:

  • on 11 May 2015, Lagardère SCA signed a €1.25 billion multi-currency syndicated credit facility for general corporate purposes. It replaced the previous €1.645 billion facility, signed in 2011. The new five-year facility has been extended for a total of two additional years, maturing in May 2022;
  • 6 April 2016, Lagardère SCA issued a total of €500 million worth of seven-year bonds on the Luxembourg stock market, maturing in April 2023 and paying an annual coupon of 2.75%;
  • on 14 June 2017, Lagardère SCA carried out a seven-year €300 million bond issue on the Luxembourg stock market, maturing in June 2024 and paying an annual coupon of 1.625%;
  • on 26 June 2019, Lagardère SCA raised €250 million through the private placement of German Schuldscheindarlehen debt instruments. The placement consisted of four euro-denominated tranches issued with five- and seven-year maturities at fixed and floating rates;
  • on 9 October 2019, Lagardère SCA issued a total of €500 million worth of seven-year bonds on the Luxembourg stock market, maturing in October 2026 and paying an annual coupon of 2.125%.

Items appearing in the Annual Financial Report are cross‑referenced with the following symbol AFR