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Japan's Nikkei to buy FT Group for 1.3 bln USD

Xinhua, July 23, 2015 Adjust font size:

Japan's largest media company Nikkei is to acquire the FT Group from British publisher Pearson Plc for 844 million pounds, or 1.3 billion U.S. dollars, in cash, ending the market rumors about the new ownership of the global news organization.

The deal comprises of the Financial Times newspaper, FT.com, and titles such as The Banker and Investors Chronicle, but excludes the FT Group's London property in central London and the Economist stake, announced Pearson on Thursday.

For the past few weeks, Pearson has been exploring a sale of FT Group, which comprises the Financial Times, a number of related titles and a 50 percent stake in Economist Group, publisher of the Economist magazine.

Pearson said that in 2014, FT Group contributed 334 million pounds of sales and 24 million pounds of adjusted operating income to Pearson. On June 30, 2015, FT Group had gross assets of approximately 250 million pounds.

At the FT, total circulation across print and digital rose more than 30 percent over the last five years to 737,000, with digital circulation growing to represent 70 percent of the total, from 24 percent, and mobile driving almost half of all traffic. Content and services now account for the majority of revenues, said the publisher.

"A contribution will be made to the Pearson group pension plan following closing of the transaction, expected to be around 90 million pounds. In addition, Pearson has committed to fund the pension plan to self-sufficiency in the near term... The balance of the proceeds will be used by Pearson for general corporate purposes and investment in its global education strategy," it said.

John Fallon, chief executive at Pearson, said in a statement: "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."

He added that Pearson will now be 100 percent focused on its global education strategy.

"The world of education is changing profoundly and we see huge opportunity to grow our business through increasing access to high quality education globally," he said.

Evercore, Goldman Sachs and J.P. Morgan Cazenove acted as financial adviser to Pearson on this transaction. Rothschild Group acted as financial advisers to Nikkei on this transaction, noted Pearson. (1 British pound=1.56 U.S. dollars) Endit