23rd Jul 2015 14:52
LONDON (Alliance News) - Pearson PLC Thursday said it is selling FT Group, which includes the Financial Times newspaper, to Japanese media group Nikkei Inc for GBP844 million in cash, meaning the company will now concentrate on its education business.
Confirmation of a deal came after the FTSE 100 publishing and education company earlier confirmed advanced talks to sell FT Group, which includes a range of financial magazines, such as The Banker and Investors Chronicle, on top of the FT newspaper and FT.com.
Nikkei, which says its flagship daily newspaper, The Nikkei, has about three million subscribers, was seen as one of the leading contenders to buy the FT Group, in competition with German publisher Axel Springer.
The deal doesn't include the sale of property at One Southwark Bridge in London - the home of the FT newspaper - nor Pearson's 50% stake in the Economist Group, which publishes the Economist magazine. There was no mention in Pearson's announcement of the Vedomosti joint venture with Dow Jones and the publishers of the Moscow Times.
"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. 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 Chief Executive John Fallon said in a statement.
"The world of education is changing profoundly, and we see huge opportunity to grow our business through increasing access to high-quality education globally," Fallon said.
FT Group contributed GBP334 million of sales and GBP24 million of adjusted operating income to Pearson in 2014, the seller said, with circulation across print and digital rising by more than 30% over the last five years to 737,000. Pearson said it expects to pay tax on disposal of about GBP60 million, though most of the proceeds from selling FT Group will be subject to tax relief.
Pearson, which has owned the Financial Times since 1957, was once a media and entertainment conglomerate, previously owning assets including The Tussauds Group - consisting of Alton Towers and the Madame Tussauds waxwork museums.
In 2013 the company reorganised its operations into a new structure, to consist of three arms - school, higher education and professional. The FT Group makes up part of its professional segment. It sold its PowerSchool Business, which provides K-12 student information systems, for USD350 million in June.
The sale of the group requires regulatory approval. It is expected to close during the fourth quarter of 2015.
A contribution of about GBP90 million is expected to be made to the Pearson group pension plan once the deal closes.
Pearson said it has committed to fund the pension plan to self-sufficiency in the near term.
Pearson shares were up 2.6% at 1,240.00 pence on Thursday afternoon.
By Samuel Agini; [email protected]; @samuelagini
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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