Hearst Corp 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). 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.
As part of the deal Fimalac’s Ladreit de Lacharriere, 71, is to stay as Fitch’s chairman until 80th birthday. Source: Reuters