The U.K.'s Pearson Plc said on Thursday it will sell FT Group, including the Financial Times, to Japan's Nikkei for $1.32 billion. The cash sale to the Japanese business publisher means Pearson is jettisoning one of its flagship media assets to sharpen its focus on its key education businesses, reports the Wall Street Journal. For years, London-based Pearson—which generates about 60% of its sales in North America and three-quarters of its revenue from education—had rejected talk it would sell its salmon-colored, business-focused title. However, Pearson Chief Executive John Fallon said Thursday afternoon that after nearly 60 years of ownership, “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.”
The employee-owned Japanese media conglomerate publishes Nikkei, the country’s leading business daily, with more than 3 million print and digital subscribers, writes Bloomberg. It also has 42 affiliated companies involved in broadcasting, events, database services and stock indexes. The deal will be the biggest overseas acquisition by a Japanese publishing company. The purchase will give Nikkei more revenue from outside Japan and a high-profile brand. The two companies also plan to share digital strategies to boost growth online.
Nikkei, founded in 1876, earned 10.2 billion yen ($82 million) last year. The FT Group had revenue of 334 million pounds and 24 million pounds in adjusted operating profit. First published in 1888 as a four-page newspaper, the FT says its circulation reached 720,000 last year, and digital subscribers accounted for 70 percent of the total. In a move to make more money online, the newspaper in February started putting almost all of its content behind a paywall, instead of allowing readers to view a few free articles every month.
The sale of the FT Group is expected to close during the fourth quarter of 2015 and does not include its 50 percent stake in The Economist magazine or the London headquarters of the newspaper on the banks of the River Thames, notes Reuters. The sale will leave Pearson as the world leader in education publishing and the owner of a 47 percent stake in the Penguin Random House book publisher.