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Bertelsmann chairman resigns

The chairman of Bertelsmann’s supervisory board announced his resignation Wednesday after clashing with the German media giant’s CEO.

Bertelsmann’s chairman, Gerd Schulte-Hillen, announced his resignation Wednesday after of a clash over corporate strategy with the German media giant’s chief executive.

SCHULTE-HILLEN, a 63-year-old company veteran, will step down as supervisory board chairman at the end of the year, Bertelsmann said. His deputy, Dieter Vogel, will replace him on an interim basis until a long-term successor is found.

Schulte-Hillen and CEO Gunter Thielen had developed “different views on the strategic direction of Bertelsmann,” the Guetersloh-based company said in a statement, without elaborating.

Bertelsmann and Sony Corp. announced earlier this month plans to merge their music businesses, bringing together the world’s No. 2 and No. 5 music companies.

The move was part of an effort by Thielen to shore up earnings by bolstering the firm’s core businesses, which also include Random House, the world’s largest general-interest publisher, European broadcaster RTL and the magazine group Gruner Jahr.

The company lauded Schulte-Hillen for 34 years of service to Bertelsmann, including three years as chairman, and insisted he left on good terms. “I regret very much the developments that have led to Gerd Schulte-Hillen’s decision,” Thielen said.

The outgoing chairman, who joined the company in 1969 as an assistant manager in the company’s printing arm, rose to take control of Gruner Jahr in 1981. He joined Bertelsmann’s top management in 1985 and became deputy chief executive a year later.

Thielen’s predecessor, Thomas Middelhoff, had taken the company into Internet ventures such as online bookseller BOL and a deal with the Internet music exchange Napster.

Middelhoff quit in July 2002 after reportedly clashing with the Mohn family, which controls 75 percent of the company, over strategy and his rejected proposal for a public offering of part of their stake.

This year, the costs of integrating the Zomba music company and restructuring within the music division have depressed Bertelsmann’s earnings.

First-half net profit fell to 142 million euros ($169 million) net profit compared to 1.6 billion euros in the same period of 2002, when earnings were lifted by the sale of a stake in AOL Europe.

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