Mohn Family, Bertelsmann and GBL agree on Buyback

Bertelsmann Verwaltungsgesellschaft (BVG), the Mohn familiy and the Bertelsmann Foundation, Groupe Bruxelles Lambert (GBL) and the Executive Board of Bertelsmann AG agreed that Bertelsmann will buy back the shares held by GBL.

The purchase price is € 4.5 billion. The financing of the transaction will enable Bertelsmann to continue to invest in growth and to maintain its solid financial standing.

The buyback of GBL’s shares will be effective on July 1, 2006.

Gunter Thielen, Chairman of the Bertelsmann AG Executive Board: “The Executive Board and the majority shareholder are convinced that the share buyback is the best option to secure the continuity and the successful development of the company on the basis of our corporate culture of partnership. Bertelsmann is in an excellent position and will achieve record results in 2006. Against this background and the expected development in the next years the purchase price agreed with GBL is reasonable. The company will maintain full strategic flexibility to further develop its businesses. Bertelsmann has proven time and again during its long history that it has the ability to expand internationally and build leading market positions.”

Liz Mohn, speaker of the family: "I am happy about the buyback. It guarantees the independence of the company and its lasting and sustained development on the basis of our proven corporate culture. It secures the greatest possible freedom for the Executive Board to manage the business."

The buyback will be financed with a bridge loan provided by several banks. A significant part of the loan will be repaid over the next 12 to 18 months by retained cash flows from operations as well as by expected proceeds from the divestiture of BMG Music Publishing. The auction process for the divestiture of this business to which Bertelsmann will invite selected bidders will start in June.

“Management is committed to bring debt levels back in line with its internal financing targets by the end of 2007. The leverage-factor, i.e. the ratio of economic debt to Operating EBITDA, is expected to be reduced to the target of 2.3 by then. The conservative dividend policy of the company allows us to reinvest large parts of the cash flow and thereby to generate profitable growth. The existing standards of transparency and communication will be maintained,” says Thomas Rabe, Chief Financial Officer of Bertelsmann AG.

Bertelsmann has been advised in this transaction by JP Morgan and Citigroup.

For further questions, please contact:

Andreas Grafemeyer

Senior Vice President Media Relations

Phone.: +49 – 1 72 – 570 36 22

andreas.grafemeyer@bertelsmann.de