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Orkla: the saga of a Norwegian media conglomerate possibly up for sale

Rumour has it that Mecom, headed by David Montgomery, has emerged as the frontrunner to take over Orkla's newspaper arm – a development I am quite excited about (though Norwegian tabloid Dagbladet and perhaps the newspaper group A-pressen are still being considered as serious alternative buyers).

The possible sale of Orkla's newspaper arm has, to my mind, been the biggest media story in Norway for months: it's been quite a roller-coaster ride, and fun to watch as the stakeholders and others have debated the virtues and vices of state ownership, cross-ownership, national ownership (only virtues) and so on and so forth.

Here's a few highlights:

1) No foreign suitors, please
The only thing that all the participants of the 'Orkla debate' have seemed to agree on is the importance of national ownership. Now me, I must admit I would have no objection to a foreign owner per see, as long as the new proprietor could provide a long term strategy and stable ownership. I started my media career at Orkla owned newspaper Drammens Tidende and have great affinity with the papers now up for sale: I want to see them secure but, perhaps corrupted by all my years abroad, I don't see the drawback of a foreign owner, on the contrary – I think it could bring some much needed fresh perspectives to an industry ripe for consolidation. Newspapers are facing many big challenges these days: the need to understand and implement new technology, declining sales of paper copies, declining ad revenues etc. And there is great need for someone who can manouver this territory successfully.

God knows, though Montgomery has a dubious reputation in the industry, he might bring some good news values from his many years in UK press. To my mind, the UK still has some of the best journalism in the world today, or to quote Stein Ringen, another Norwegian, writing in the British Journalism Review in 2003:

"Compared to anywhere else in Europe and beyond, it [British press] is informative, lively, varied and pluralistic, entertaining and often funny, politically vibrant – and it is independent, critical, irreverent and, thank God, intrusive. It does its job... No one who has been outside of Britain and seen the tedious and inept press most democracies are burdened with would, in their right mind, want that instead of what we have. "

However, Mecom's current newspaper portfolio is very 'paper-based', the group can't really be said to be at the forefront of the electronic revolution, and this would clearly be an argument against Mecom's bid. The vulnerability inherent in the company's highly geared business model is another cause for concern.

2) Giske as Berlusconi
Norway's cultural minister, Trond Giske, was accused of 'doing a Berlusconi' when he re-interpreted the country's strict laws on media cross-ownership just a week after the Labour Union dominated newspaper group A-pressen had put in their bid for Orkla's newspaper arm (A-pressen is effectively owned by the Labour Union and the part-privatised former state monopoly Telenor, whose majority shareholder still is the Norwegian state).

3) The Labour Union as hardcore capitalists
A-pressen is still vying for the Norwegian Orkla papers and denounce that they are no longer in the running. However, the strong 'synergy' effects between Orkla and A-pressen would mean shedding at least 400 jobs just in Norway according to Dagladet (another of the bidders) – a bit of ironic seeing how the Union would be on the barricades if any other jobs were to be shed (except those of management and 'fat cats'). Besides, Orkla chairman Stein Erik Hagen has signalled that he won't stand for the State, through the Labour Union and Telenor, getting it's hands on Norway's 'last conservative media company'.

4) To sell or not to sell
Now these intrigues and efforts to postion one or the other bidder as more ideal or wicked than the other, might actually be a complete waste of time – hence the ‘possibly up for sale’ in my headline. There’s been quite a bit of speculation throughout the sales process that Orkla might not go through with the sale at all, or enter into a partnership with a third party – a theory which this article offers some justification for. If Orkla does decide against selling, it would be after having caused its newspaper folks a lot of unnecessary grief - and I can't really see how this would increase staff loyalty.


Hepp. I found your excellent blogpost just after having published my own, on more or less the same topic. In Swedish though. My theory is that we have seen this happen before (Hafslund/Fortum, Storebrand/Sampo, Telenor/Telia) and will see it again (SAS?).

Yes, history keeps repeating itself. I don't think so much it's the Norwegian's scepticism to foreigners that does it though, rather it's the thoughts of his own supremacy - as my entry on Gudleiv Forr's latest stroke of genius illustrates. Mix this self-congratulating attitude with renewed faith in active state ownership and you've got a dangerous mix indeed - at least for the country's economy.

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