As previously announced, LVMH is in exclusive negotiations with Pearson over the proposed acquisition of Groupe Les Echos (Les Echos) for €240m.
Both companies believe that the quality of Les Echos' journalism is fundamental to its reputation in the business and media communities, and to its commercial success. They have therefore determined that arrangements for continuing Les Echos' tradition of editorial quality and independence, and for securing the employment prospects of its people, should be a fundamental part of the proposed transaction.
In recent weeks, Pearson has initiated a dialogue with the employees of Les Echos, including its Works Council and Society of Journalists, and has discussed their concerns and ideas with LVMH.
As a result of this process, LVMH and Pearson have developed a series of measures designed to protect editorial independence and jobs at Les Echos.
Editorial quality and independence
The editorial independence arrangements, which will be incorporated into the statutes of Les Echos, include the following:
- An 11 member supervisory board will be established, which will include three independent members and the editor-in-chief of Les Echos.
- The three independent members will be appointed by the Company's shareholders from candidates agreed unanimously by a committee comprised of representatives of LVMH and the Society of Journalists.
- Mr. Izraelewicz will be Editor-in-chief of Les Echos (as previously announced, he will assume this role on September 1, 2007 on the retirement of Mr. Jacques Barraux). Neither Mr. Izraelewicz nor any future editor-in-chief may be dismissed by the Supervisory Board without the approval of at least two independent members.
- Any future editor-in-chief will be nominated by LVMH subject to the approval of the supervisory board, including at least two independent members, unless the appointment is vetoed by a majority of journalists at Les Echos.
- The same appointment process will apply to the editor-in-chief of "Enjeux".
- An ethical charter - a high level framework for the protection of editorial quality and independence - will be agreed by LVMH, Pearson and the Society of Journalists.
- An Editorial Independence Committee will be established, consisting of two members of the supervisory board representing LVMH; two of the independent members and two members appointed by the Society of Journalists. Its role will be to ensure that the values of the ethical charter are upheld. The Committee will consider complaints from any editor or journalist regarding any alleged breach of the editorial independence by the shareholders. If the Editorial Independence Committee upholds a complaint, the Committee will require the Editor to publish the complaint prominently in the newspaper and the affected journalists may exercise their 'Clause de Conscience', which allows them to resign and receive a dismissal payment.
- These editorial independence arrangements can only be changed with the approval of two of the three independent members.
- There will be no redundancies of Les Echos people for at least 3 years.
- The terms of the existing collective agreements will be maintained for at least 5 years.
- All employees entitled to exercise their 'Clause de Cession' right, which allows them to resign and receive a dismissal payment as a result of the sale, will have the right to do so for two years from the closing.
LVMH and Pearson believe that these arrangements provide a sound foundation for the continuing journalistic and commercial success of Les Echos.
For more information:
Michael Calzaroni/ Olivier Abesse
+ 33 1 40 70 1189
+ 44 207 153 1534
Auro Palomba/ Lavinia Borea/ Roberto Patriarca
Presse Financiere et Corporate
+ 39 02 89 40 42 31
James Fingeroth/ Victoria Weld/ Molly Morse/ Blake Kohn
Kekst & Company
+ 1 212 521 48 00
+ 44 207 010 2310