Some more M&A afoot in the media industry. Pearson has sold the Financial Times Group to Japan’s Nikkei Inc for £844 million ($1.3 billion) in cash. The news comes after a morning of fervent speculation that the Financial Times was on the block, with some speculating that Axel Springer would be the buyer.
In addition to the iconic pink newspaper, the group includes the FT.com website, How to Spend It, FT Labs, FTChinese, the Confidentials and Financial Publishing (which includes The Banker, Investors Chronicle, MandateWire, Money-Media, Medley Global Advisors and more).
It will not include Pearson’s 50 percent stake in the economist or the FT’s offices on the banks of the River Thames in London. However this sale will lead to questions about the future of those assets, too, especially as Pearson itself has said that going forward it will focus on its education business.
“Pearson has been a proud proprietor of the FT for nearly 60 years. But we’ve reached an inflection point in media, driven by the explosive growth of mobile and social,” said John Fallon, Pearson’s CEO, 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 will now be 100% focused on our global education strategy,” he continued. “The world of education is changing profoundly and we see huge opportunity to grow our business through increasing access to high quality education globally.”
The FT is not the UK’s largest newspaper — it has a circulation of 737,000, up 30 percent in the last five years, with digital accounting for 70 percent of that currently. But it is one of the most prestigious, in particular among the financial community that is also targeted by Nikkei .
The company had sales of $519 million (£334 million) in 2014, Pearson says.
While Pearson is turning its attention to education publishing and education services, Nikkei is a logical new parent for the FT. The Japanese company already publishes its own eponymous newspaper and has been looking for ways to expand its footprint into markets further afield — not unlike other Japanese companies like Rakuten, which has also been making acquisitions outside of its home market.
“I am extremely proud of teaming up with the Financial Times, one of the most prestigious news organizations in the world,” said Tsuneo Kita, chairman and group CEO of Nikkei, in a statement. “Our motto of providing high-quality reporting on economic and other news, while maintaining fairness and impartiality, is very close to that of the FT. We share the same journalistic values. Together, we will strive to contribute to the development of the global economy.”
Nikkei may not have the same global presence and reputation as the Financial Times, but the two share plenty in common — most notably, a paywall.
The 140-year-old Japanese media company’s core publication is the Nikkei Online Edition. The five-year-old business, which puts out short bulletins and news in Japanese, claims an impressive paying customer base of more than 400,000 subscribers.
That said, the organization has been criticized for churning out financial and business-focused news with little interest in investigative stories, which in recent times has included important work related to the nuclear fallout from the 2011 Japanese tsunami and, more recently, this year’s scandal around the Takata airbag defects.
The Nikkei has also ventured into internationally focused content with the Nikkei Asian Review, which is both online and a weekly print magazine.
Many Japanese corporates are squarely focused on the domestic market, but Nikkei has ventured into Southeast Asia with an editorial base in Bangkok, Thailand, and the launch of Nikkei Group Asia, a Singapore-based entity launched last year that is charged with regionalizing the company’s content across the continent.
Nikkei President Naotoshi Okada has spoken of his desire to grow the company’s presence overseas — those two aforementioned offices doubled its number of reporters stationed outside of Japan — while the company is aiming to increase the number of females in its managerial team to 15 percent by 2020.
“Our goal is nothing short of making Nikkei the leading media voice in Asia,” Okada said in a statement on the media company’s website.
The acquisition of the FT Group follows speculation that Axel Springer was reportedly interested in buying the Huffington Post from AOL, which itself was acquired by Verizon earlier this year for $4.4 billion.