Hearst buys another 10 percent of Fitch for $177 million
Hearst Corp said Thursday it agreed to buy another 10 percent of rating agency Fitch Group for $177 million as the media giant continues to diversify away from its newspaper foundations.
Hearst bought the stake from France's Fimalac SA (LBCP.PA). The two companies now each own 50 percent of Fitch, considered the third rating agency behind Moody's Corp (MCO.N) and Standard & Poor's, owned by McGraw-Hill MHP.N.
"The acquisition of an additional 10 percent interest in Fitch demonstrates our confidence in the company and in its future growth," Hearst Chief Executive Frank A. Bennack, Jr., said in a statement.
Hearst first invested in Fitch in 2006, paying about $600 million for a 20 percent stake. In 2009, the media company bought another 20 percent of Fitch for about $427 million.
Rating agencies were heavily criticized during the financial crisis of 2008 and 2009 when some of the securities they had rated AAA turned toxic. There have been calls to clamp down on the companies but they have mostly avoided draconian new regulations.
Hearst owns 15 daily newspapers and is one of the largest magazine publishers in the world. But the company has invested in other businesses to diversify, including emerging media and tech businesses like Pandora Media (P.N).
(Reporting By Alistair Barr, editing by Dave Zimmerman)