Merger with Audiofina & CLT-UFA/Presentation, etc

Pearson PLC
7 April 2000

There will be a presentation to analysts and investors at 9.30am today at
Pearson Television, 1, Stephen St, London, W1, followed by a press conference
at 11am. There will be live webcasts of both events on www.pearson.com and
www.bertelsmann.de.  

Friday 7 April

Audiofina, CLT-UFA and Pearson Television merge to create Europe's leading
integrated broadcast and content group

Bertelsmann AG, Groupe Bruxelles Lambert S.A. ('GBL') and Pearson plc
('Pearson'), have today agreed to merge CLT-UFA, Europe's leading commercial
television and radio broadcaster, with Pearson Television ('PTV'), the world's
leading international independent television production company.

The new group will be the leading pan-European integrated broadcast and
content company with annual revenues of some 4 billion Euros. It will seek a
primary listing on the London Stock Exchange as from completion of the merger.

Bertelsmann and GBL, the two co-controlling shareholders in CLT-UFA, will
reorganise their interests in CLT-UFA and Audiofina. As a result, Bertelsmann,
along with WAZ, the German publishing company, will have an economic interest
of around 37% in Audiofina, with GBL holding an economic interest of
approximately 30%.  Pearson will hold an economic interest of 22% and around
11% will be publicly held. Audiofina, which is listed in Brussels and
Luxembourg, will be renamed, with the new name of the company announced at a
later date.

In 1999, the combined group generated proforma earnings before interest and
tax of 459 million Euros (including associates) on proforma revenues of 3.78
billion Euros. At 1 January 2000, the group had a proforma net cash position
of 308 million Euros.

CLT-UFA

CLT-UFA has interests in 22 television channels, which attract more than 120
million daily viewers, and 18 radio stations, which attract more than 25
million daily listeners, across Europe.  The main broadcast brands are RTL, M6
and Channel 5. In a joint venture with PTV, CLT-UFA is a major force in
television production company in Germany. CLT-UFA also operates one of
Europe's leading sports rights businesses, marketing the broadcast rights of
some 40 national football teams and 250 soccer clubs across Europe. It has a
rapidly growing online presence, with more than 70 branded internet sites
across Europe that generate some 150 million page views per month.

PTV

PTV has some 160 television programmes in production in 35 countries around
the world, producing over 10,000 hours of programming every year. It makes
sales from its library of some 17,500 hours of programming to over 100
territories.  It owns a leading selection of game show formats, is the largest
producer of serial dramas and makes a wide range of entertainment programmes.
It has shareholdings in broadcasters in the UK, Hungary, Spain and Australia
and in Uproar.com, one of the world's leading online entertainment sites.

Audiofina

Listed on the Luxembourg and Brussels stock exchanges, Audiofina
(AUFI.LX/AUFI.BB) currently controls 49.85% of CLT-UFA. In addition, it holds
a 28% interest in Groupe Jean-Claude Darmon, the Paris-listed sports rights
marketing group. At 31 December 1999, Audiofina had net cash balances of 794
million Euros.

Reasons for the merger

The combination of CLT-UFA and PTV will create an integrated pan-European
company with highly successful business operations spanning television and
radio broadcasting, television production, sports rights and online
activities. This will put the combined company in a better position to achieve
stronger revenue and earnings growth:
 
* PTV's content will enrich the broadcast channels, enabling them to attract
bigger audiences with more in-house productions;

* CLT-UFA's broadcast channels will provide expanded routes to market for
PTV's content;

* Access to Europe's most important broadcast network will enable the combined
company to be more innovative in developing new television genres, shows and
formats;

* Combining rich content with powerful cross-promotional platforms on tv and
radio will enable the company to build one of Europe's leading online and new
media presences;

* The combined company will have the financial, management, production and
broadcasting strengths to accelerate growth, both organically and through
acquisition, in existing European markets and break into new markets
worldwide;

* The combined company will also own a 65% stake in Channel 5, the UK's
fastest growing terrestrial channel.

Management and board structure

Didier Bellens, chief executive of CLT-UFA, will be chief executive of the new
group. Richard Eyre, chief executive of PTV, will be the executive director
responsible for leading the content business and directing the new group's
future development and strategy. Richard Eyre is also expected to become
chairman of Channel 5. Ewald Walgenbach, chief operating officer of CLT-UFA,
will take up the same role in the new group.
 
In addition to the executive directors, the company's board of directors will
include 11 non-executive directors, of which  six will be appointed by
Bertelsmann and GBL and two by Pearson. Thomas Middelhoff (CEO of Bertelsmann)
Siegfried Luther (Bertelsmann's CFO), Erich Schumann (CEO of  WAZ), Marjorie
Scardino (CEO of Pearson) and John Makinson (Pearson's CFO), are all expected
to join the board. GBL will nominate its board representatives at a later
stage.  Three independent non-executive directors will be appointed, of whom
one will be nominated as chairman.

Marjorie Scardino, chief executive of Pearson, commented:
'This deal puts Pearson Television at the heart of one of Europe's most
extensive - and most popular - broadcasting networks.  It provides the stage
on which talent can really flourish, creating compelling entertainment across
radio, television and new media.  We also see the chance for other parts of
Pearson to work with this new company to cross promote our brands and content
through all media.'

Commenting on the merger, Bertelsmann CEO Thomas Middelhoff said: 
'Bertelsmann, in the last few weeks, clearly strengthened its positions in the
area of content and significantly boosted the e-commerce business.  We are now
catapulting our television business into a new dimension, enabling the new group
to develop new content and genres for combined television and internet
operations.  Through Audiofina, one of our expansive core businesses can
utilize the tremendous potential of the stock market for further expansion for
the first time.'
 
Albert Frere, Chairman of GBL, said:  
'My business partner, Paul Desmarais, and I are very happy with the tremendous
progress made by CLT-UFA since the merger some three years ago in transforming
Europe's largest broadcaster into a highly profitable and tightly focused
group. Today's merger marks a further step in the successful strategy
developed with our partner, Bertelsmann. The alliance between CLT-UFA and
Pearson Television offers great opportunity for growth and the creation of
shareholder value.'


Please direct enquiries to:

John Fallon, Pearson plc Corporate Communications
Tel.: [phone] 
E-mail: [e-mail]

Oliver Herrgesell, Bertelsmann AG Corporate Communications
Tel: [phone]
E-mail: [e-mail]

Patrick De Vos, GBL 
Tel.: + 32 2 547 2287 
E-mail:[e-mail]

Ingrid Haas, CLT-UFA Corporate Communications
Tel: + 352 42142 5020
E-mail: [e-mail]

Roy Addison, Pearson Television Corporate Communications
Tel: + 44 171 691 6830
E-mail: [e-mail]

Nicola Weiner, College Hill (for Audiofina)
Tel: + 44 171 457 2020
E-mail: [e-mail]


Notes to Editors

THE TERMS OF THE AGREEMENT

Under the terms of an agreement, dated 7 April 2000, between Audiofina S.A.,
('Audiofina') BWTV GmBH (a subsidiary of Bertelsmann A.G.) ('BWTV'), Groupe
Bruxelles Lambert S.A., ('GBL') and one of its subsidiaries, Electrafina, and
Pearson plc, ('Pearson') the parties have agreed the following principal
terms:

I. In exchange for the contribution of Pearson TV, Pearson will receive 22% of
the enlarged fully diluted share capital of Audiofina;
II. BWTV and GBL will reorganise their  interest in CLT-UFA and Audiofina such
that they will own, on a 50/50 basis, directly or indirectly, 60% in Audiofina
(of which at least 50.1% will be held through a joint structure or arrangement
('BWTV/GBL Alliance'));
III. Pearson TV will be entitled to all future dividends on Audiofina shares
other than the proposed dividend of 114 Lux Francs per share proposed in
respect of the year to 31 December 1999;
IV. The transaction will be conditional on inter alia; (a) the approval of
appropriate competition and regulatory authorities (including the European
Commission, under the Hart Scott Rodino Act and the Independent Television
Commission in the UK); (b) the listing of Audiofina on the London Stock
Exchange; (c) certain tax clearances considered necessary by the parties; (d)
the approval of Audiofina shareholders; and (e) there being no material breach
of certain covenants and warranties given in the agreement;
V. To give certain mutual pre-completion undertakings, representations and
warranties and tax indemnities;
VI. Certain limited matters relating to dividend policy, capital increase,
corporate governance, major transactions and significant debt increase will
require the approval of the BWTV/GBL Alliance and Pearson;
VII. The existing rights of the employees of Pearson TV will be fully
safeguarded;
VIII. The parties other than Audiofina will agree for the period  to 31
December 2003 not to compete with Audiofina in the business of television and
radio station broadcasting (subject to certain exceptions);
IX. Pearson will be granted warrants to subscribe for a further 2% of
Audiofina shares in the period to 3 December 2003 at prices ranging from 160 -
180 Euros to maintain its holding above 20% of Audiofina; 
X. Each of the parties will have certain pre-emption rights over the sale of
shares in Audiofina and, in the event of a sale of a direct or indirect
holding of 40% of Audiofina, that Pearson will have a right to 'tag along' (ie
sell out to any purchasers of any such holding on the same terms); and
XI. Pearson will lose its minority protection, board representation,
pre-emption and tag along rights if its stake in Audiofina fall below 15%
(although it may appoint one director until its holding falls below 10%).  It
will also lose such rights on a change of control.

CLT-UFA

CLT-UFA's major business operations are in free-to-air broadcasting, content
production and radio broadcasting. In 1999, it generated earnings before
interest and tax of 346 million Euros (including associates) on sales of 3.211
billion Euros (excluding exceptional items.)

Free-to-Air Broadcasting

CLT-UFA has interests in 22 television channels, in 11 European countries,
which reach over 120 million viewers per day. In both reach and revenue terms,
it is the largest broadcaster in Europe.
 
In Germany, it owns RTL TV, holds a 74.8% stake in Vox and also has stakes in
RTL 2 (35.9%) and the children's channel, Super RTL (50%.) In the UK, it owns
a 35% stake in Channel 5, the UK's fastest growing terrestrial channel.  In
France, it owns a 42% stake in  the M6 Group. M6 is France's second largest
commercial channel and the group also operates six thematic channels and owns
25% of the pay tv channel, TPS. Outside of the M6 Group, CLT-UFA has a stake
in RTL 9 (35%), a general entertainment cable channel, and TMC (23.8%), Monte
Carlo's family channel. In the Netherlands, it owns HMG Group, operating  RTL
4, a general entertainment channel, RTL 5, a specialist news channel and
Veronica, which  is aimed at teenagers and young adults. In Belgium, it has
stakes in RTL TVI (66%), a leading French speaking channel and Club RTL (66%),
a themed channel aimed at the youth market. It also owns RTL Tele Luxembourg,
RTL 7  in Poland and has a 49% stake in RTL Klub in Hungary. It also owns a 5%
stake in Premiere, the German pay-tv sports channel.


Content and Rights Ownership

CLT-UFA is a major producer of television programmes in Germany, producing
over 1,000 hours of programming per year. Its production companies are UFA
Productions, Trebitsch Produktion, Delux Productions and Grundy-UFA, a joint
venture with PTV. Its sports rights company, UFA Sports, owns the broadcast
rights for over 300 clubs and 40 national teams. It also has a TV Rights
business, which owns a library with 5,500 hours of television programmes and
700 video titles.

Radio

CLT-UFA is one of Europe's leading radio companies, owning stakes in 18 radio
channels across Europe. In Germany, it owns stakes in  2 national radio
stations  and 5 regional stations covering Berlin, Hamburg, Cologne and
Bavaria. In France, it owns RTL, a general interest radio station, RTL 2,
which is aimed at the 20 - 40 age range, and Fun Radio, which is aimed at the
20-25 age range. It also owns stakes in radio stations in the UK (80%),
Luxembourg (100%), two stations in Belgium (43% and 35%), one in the
Netherlands (39.5%), two stations in Scandinavia (49% and 100%) and one in
Austria (25.1%).

PEARSON TELEVISION

Pearson Television is one of  the  leading independent international
television production companies in the world. It has some 160 programmes in
production in 35 countries around the world and makes sales from its library
of over 10,000 hours of programming to over 100 territories.  It owns an
important selection of  game show formats, is the largest producer of serial
dramas and makes a wide range of entertainment programmes, including situation
comedies, children's animation and action adventures. Its most popular
programmes include Baywatch, The Bill, Salatut Elamat, Skilda Varldar, Gute
Zeiten, Schlechte Zeiten, Verbotene Liebe, Unter Uns, Hinter Gittern, The
Price is Right, Family Feud, Night Fever, 100%, Match Game and Neighbours.

It also owns a 29% stake in the UK's Channel 5, 20% stakes in RTL Klub in
Hungary and UKTV in Australia and a 7% stake in Uproar.com, one of the world's
leading online entertainment sites. From its studios in central London, PTV
also runs a transmission business, which transmits 50 channels for
broadcasters such as Flextech, Discovery and Universal.

MAJOR SHAREHOLDERS IN THE NEW COMPANY

Bertelsmann AG: Bertelsmann ranks among the world's premiere media
enterprises. The company's 72,000 employees generate some 15 billion Euros in
revenues in 53 countries. Founded in 1835 as a Christian publishing company in
the State of North Rhine Westphalia's town of Gutersloh, the firm has evolved
to become a full-fledged media and entertainment business serving the full
range of media segments, covering the book, newspaper, magazine, scientific
literature, music, radio, television, film production and printshop
submarkets. Moreover, Bertelsmann provides media services of all kinds and has
established a formidable Internet and e-commerce presence that is second to
none in its peer group. Bertelsmann's characteristic features are the
company's decentralized structure counting over 600 individual firms, most of
which are independent, its policy of internal journalistic pluralism and its
clear commitment to a multiple-brand policy for media audiences in its various
language and cultural regions of activity. The majority of the company's
capital stock is owned by the Bertelsmann Foundation. Voting rights are held
by the administrative body Bertelsmann Verwaltungsgesellschaft to which post
WWII founder, co-owner and benefactor Reinhard Mohn transferred his voting
rights.

Groupe Bruxelles Lambert S.A.: Groupe Bruxelles Lambert S.A. is an investment
holding company incorporated in 1953 which has been quoted on the Brussels
Stock Exchange since 15 October 1956.  GBL is controlled by the families Frere
and Desmarais through their respective holding companies. The Group has a
market capitalisation of 5.5 billion Euros.  GBL aims to grow a rich and
balanced portfolio of industrial investments, focusing on a small number of
first-class companies acting in a diversified range of sectors, in which GBL
can exercise its role as a professional shareholder.  GBL's actual portfolio
includes five long-term investments : CLT-UFA, TotalFina, Suez Lyonnaise des
Eaux, Imerys and Rhodia, held directly or through two intermediate companies :
Electrafina (80.8 %) and Audiofina (72.6 %). Since the merger of the group CLT
and UFA in 1997, GBL has participated, through its joint venture with
Bertelsmann, in the development of CLT-UFA as a major European broadcasting
group.  GBL's 50 % investment in CLT-UFA, through the quoted company
Audiofina, represents presently nearly 50 % of the estimated value of GBL.

Pearson plc is an  international media company.  In 1999, it made operating
profits of £549m on sales of £2,395m. In addition to Pearson Television, its
major business operations are: The Financial Times group, which has an
international network of business and financial newspapers and online services
which are read by millions of business executives and investors every day;
Pearson Education, the world's leading education business, which helps
teachers teach and students learn at every stage and in every part of the
world; The Penguin Group, which is one of the pre-eminent names in consumer
publishing, with an unrivalled range of fiction and non-fiction, bestsellers
and classic titles; and Recoletos, one of the top media companies in Spain,
which is also breaking out into new Spanish and Portuguese speaking markets.