Tags: Nikkei | Financial Times | Pearson | mergers

Nikkei Agrees to Buy FT Group From Pearson for $1.3 Billion

Thursday, 23 July 2015 11:43 AM

Japanese publisher Nikkei Inc. agreed to acquire the FT Group for 844 million pounds ($1.3 billion), ending almost six decades of control of the Financial Times newspaper by Pearson Plc.

The sale doesn’t include Pearson’s 50 percent holding in the Economist Group and some London property, Pearson said Thursday. The price includes 19 million pounds in cash held by the FT Group. Nikkei’s namesake newspaper is Japan’s biggest business daily.

The deal would be the biggest overseas acquisition by a Japanese media company, Tokyo-based Nikkei said. A sale of FT Group will allow Pearson to focus on tackling a slowdown in its education unit, which has been hampered by declining U.S. college enrollments and falling textbook sales.

“We’ve reached an inflection point in media, driven by the explosive growth of mobile and social,” Pearson Chief Executive Officer John Fallon said in a statement. “In this new environment, the best way to ensure the FT’s journalistic and commercial success is for it to be part of a global, digital news company.”

Pearson shares rose 2.4 percent to 1,238 pence at 4:15 p.m. in London, valuing the company at 10.2 billion pounds. Axel Springer SE, which was said to be in talks to buy the assets, rose 0.1 percent to 50.72 euros in Frankfurt.

The Nikkei is Japan’s most influential business publication, with more than 3 million print and digital subscribers, according to the company’s website. Nikkei has 42 affiliated companies involved in publishing, broadcasting, events, database services and stock indexes.

Digital Subscriptions

Nikkei earned 10.2 billion yen ($82 million) in 2014, according to the company’s website. The FT Group had 2014 revenue of 334 million pounds and 24 million pounds in adjusted operating profit.

First published in 1888 as a four-page newspaper, the FT’s circulation reached 720,000 last year, with digital subscriptions accounting for 70 percent of the total. In a move to make more money from online readers, the newspaper in February tweaked its paywall system, moving away from a metered model that allows readers to view a few free articles every month before requiring them to pay.

Pearson said it plans to put about 90 million pounds of the proceeds into its pension plan.

Evercore Partners Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. provided financial advice to Pearson, while Freshfields Bruckhaus Deringer LLP acted as the company’s legal adviser. Financial advisory firm Rothschild helped Nikkei, which received legal advice from Skadden, Arps, Slate, Meagher & Flom LLP.

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Japanese publisher Nikkei Inc. agreed to acquire the FT Group for 844 million pounds ($1.3 billion), ending almost six decades of control of the Financial Times newspaper by Pearson Plc.
Nikkei, Financial Times, Pearson, mergers
411
2015-43-23
Thursday, 23 July 2015 11:43 AM
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