Pearson to Sell 50 Percent Stake in Economist Group for $730M
After a deal to sell the Financial Times, the British company will now focus on its education business.
London-based Pearson said Wednesday that it has agreed to sell its 50 percent stake in the Economist Group, which includes The Economist, for $730 million (£469 million).
Exor, the Agnelli family’s investment firm that also controls automaker Fiat Chrysler and that is already a small shareholder, will buy 27.8 percent of the group's ordinary shares and all of its special B shares, with The Economist Group itself buying the rest of Pearson's stake for $283 million (£182 million).
Overall, the deal will take Exor’s stake from 4.7 percent to 43.4 percent. The Economist Group is profitable with a $94 million (£60 million) operating profit for the year ended in March.
The deal allows Pearson to exit its news business after it agreed to sell Financial Times owner FT Group to Japan’s Nikkei for $1.3 billion.
Pearson will now focus on its education business. "Pearson is now 100 percent focused on our global education strategy," said Pearson CEO John Fallon. "The world of education is changing rapidly and we see great opportunity to grow our business."
The Economist Group includes not only the magazine, but also the Economist Intelligence Unit and CQ Roll Call, which tracks legislative and policy news with such publications as Congressional Quarterly.
Analysts say that Pearson may also put its 47 percent stake in book publisher Penguin Random House up for sale. German media giant Bertelsmann owns the rest and is a possible buyer.