Pearson Sells Financial Times To Nikkei For $1.3 Billion

(RTTNews) - British publishing and education company Pearson plc (PSO, PSON.L) agreed Thursday to sell the Financial Times Group to Japanese media group Nikkei, Inc. for $1.31 billion in cash.

The deal, subject to a number of regulatory approvals, is expected to close during the fourth quarter of 2015.

The sale includes the FT newspaper, FT.com, How to Spend It, FT Labs, FTChinese, the Confidentials and Financial Publishing, including The Banker, Investors Chronicle, MandateWire, Money-Media, Medley Global Advisors and more.

Pearson has for the past few weeks been exploring a sale of the FT group. Pearson had confirmed earlier in the day that it was in "advanced discussions" to sell off the FT Group.

Reports had stated German publisher Axel Springer SE as the potential buyer, while Nikkei, Thompson Reuters and Bloomberg as well as investors in Europe, the Middle East and Asia were also said to be in the fray. Axel Springer had first approached Pearson about buying the FT about one year ago.

"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's Chief Executive John Fallon said.

Pearson noted that the sale does not include FT Group's London property at One Southwark Bridge and Pearson's 50 percent stake in The Economist Group, publisher of the Economist magazine.

The sale of the salmon-colored newspaper will now enable Pearson to be 100 percent focused on its global education strategy. The sale will bring the curtain down on Pearson's 58-year ownership of the London-based global news organization. Pearson bought the FT in 1957 in a deal that also included a 50 percent stake in The Economist Group.

FT Group contributed 334 million pounds in sales and 24 million pounds of adjusted operating income to Pearson in 2014.

Pearson noted that the proceeds from the sale, after paying tax on disposal of about 60 million pounds, will be used for general corporate purposes and investment in its global education strategy.

"Nikkei has a long and distinguished track record of quality, impartiality and reliability in its journalism and global viewpoint. The Board and I are confident that the FT will continue to flourish under Nikkei's ownership," Fallon added.

Nikkei is the largest independent business media group in Asia. It acts as an operating holding company with its flagship newspaper Nikkei as a core.

For the deal, Evercore, Goldman Sachs and J.P. Morgan Cazenove acted as financial adviser to Pearson, while Rothschild Group acted as financial advisers to Nikkei.

Pearson is due to report its half-yearly financial results tomorrow.

In Thursday's regular trading session, Pearson shares are trading on the LSE at 1,231.35 pence, up 22.35 pence or 1.85% on a volume of 4.77 million shares.