German media firm Axel Springer has agreed to buy the Telegraph Media Group (TMG) for £575 million, scuppering efforts by the owner of the Daily Mail to snap up its UK newspaper rival.

It is the latest major twist in a roughly three-year ownership tussle for the politically influential newspaper group.

Daily Mail and General Trust (DMGT) had previously agreed a £500 million deal to buy The Telegraph last year.

However, Abu Dhabi-backed consortium RedBird IMI said it now plans to sell the business to the Berlin-based Politico owner.

Axel Springer and TMG said the deal will “preserve the integrity” of the brand and help provide a platform for growth.

The companies stressed their commitment to independent journalism in the UK and said they look forward to further discussions with the Department for Culture, Media and Sport (DCMS) and other stakeholders in the coming weeks.

Culture Secretary Lisa Nandy had launched an intervention and competition probe into the previous deal agreed with DMGT, amid concerns of the size of the newspaper market taken up through a merger deal.

Bosses at Axel Springer, which also owns the German newspaper Bild, said they will back an investment programme in TMG to expand the business to help it “become the leading centre-right media outlet in the English-speaking world”.

They also plan to expand the company’s footprint in the US market, potentially leveraging expertise from its Politico and Business Insider titles.

Axel Springer chief executive Mathias Dopfner said: “More than 20 years ago, we tried to acquire The Telegraph and did not succeed.

“Now our dream comes true.

“To be the owner of this institution of quality British journalism is a privilege and a duty.”

In a statement, RedBird IMI said the German business is partly well placed to buy the Telegraph due to the “straightforward regulatory path to ownership” involved in the deal.

“Our team is now working closely with the UK Government to obtain the necessary approvals to finalise this transaction,” the company added.

RedBird IMI is having to sell the Telegraph business after its own takeover move was blocked by the then-Tory government over foreign ownership concerns.

RedBird IMI, which was partly backed by US firm RedBird Capital but majority-owned by Sheikh Mansour bin Zayed Al Nahyan, vice president of the United Arab Emirates, originally agreed to buy the media firm and fellow title The Spectator in 2023.

The Spectator has since been sold to hedge fund tycoon Sir Paul Marshall’s OQS Ventures business for £100 million.

Lengthy talks were then held to find a new suitor after RedBird IMI was forced to sell, with New York Sun publisher Dovid Efune in exclusive discussions to take control.

These collapsed before DMGT struck an agreement with RedBird IMI.

Reports last month indicated that Axel Springer was considering backing a deal with Mr Efune.

On Friday, Axel Springer said it would “like to acknowledge” Mr Efune for “his essential support and assistance on this transaction”.

It is understood that Axel Springer will gain full ownership of TMG as part of the deal.

A spokesman for DMGT criticised the “protracted and out-of-date” regulatory framework which it said disadvantages UK newspaper groups in merger processes.

The company said: “We have worked hard to complete the acquisition of the Telegraph and were confident that the organisation would have thrived under our long-term stewardship,” the company said.

“We were optimistic about our plans to invest in its exceptional journalism and secure the future of a respected British media brand.

“We wish every success to Axel Springer and the Telegraph.

“We believe that the protracted and out-of-date regulatory framework guarantees that UK-based national newspaper groups are at a huge competitive disadvantage in any merger process.”