Nikkei, the Japanese media conglomerate, has pulled off a media coup by snapping up the 127-year-old Financial Times from the Pearson publishing group in a deal worth £844m.
Nikkei, an employee-owned specialist in financial news and the largest independent business media group in Asia, promised it would maintain the FT’s reputation for “fairness and impartiality”.
Pearson, which had been exploring a sale for the group over the past few weeks, said it now wanted to focus on its role as the world leader in education publishing.
Under the terms of the deal, the British company will retain the FT Group’s 50 per cent stake in The Economist magazine, and its building on the South Bank of the Thames.
The move represents a dramatic reversal for Pearson. In 2003, its former chief executive, Dame Marjorie Scardino, pledged that the FT would only be sold “over my dead body”. But her successor, John Fallon, who took over in January 2013, said that it was time to bring the 58-year association with Pearson to an end.
“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 said.
Mr Fallon said the “Pink ‘Un” would be safe in the hands of the publisher of the Nikkei, the world’s highest circulation financial newspaper with a daily audience of 3 million. “Nikkei has a long and distinguished track record of quality, impartiality and reliability in its journalism and global viewpoint,” he said.
Tsuneo Kita, the chairman, said: “Our motto of providing high-quality reporting on economic and other news, while maintaining fairness and impartiality, is very close to that of the FT. We share the same journalistic values. Together, we will strive to contribute to the development of the global economy.”
But Chris Bryant, Labour’s culture spokesman, pressed Nikkei to stand by its commitment to protect the FT’s values. “The FT is a major national institution and it must be in the commercial interests of the paper to ensure its full editorial independence,” he said. “I hope Nikkei will rapidly make clear that they intend to abide by the spirit of the FT.”
Announcing the deal to staff, Lionel Barber, the editor of the FT, said he had “every reason to believe” that Nikkei was as committed as Pearson to the “vital principle” of editorial independence. He promised that “the new owner will not take a look at the editorial budget and cut it. That is not what this is about”.
The deal followed days of speculation over a sale, with the FT itself reporting that Axel Springer, the German publisher, was in advanced talks to buy the FT Group.
The FT’s large pension fund deficit had previously been seen as a stumbling block for a sale. The deal will see £90m contributed to Pearson’s pension plan and a tax charge of about £60m, with the rest of the proceeds used “for general corporate purposes and investment in its global education strategy” Pearson said.
The sale was announced on the eve of Pearson’s half-year results. Last year, the group, which gets 90 per cent of its revenues from its educational book publishing business, reported a 12.5 per cent fall in net profit to £471m. Pearson said the FT had enjoyed a circulation rise of more than 30 per cent across print and digital over the past five years to 737,000, with digital subscriptions accounting for 70 per cent.
Pearson will retain the freehold on the FT’s home for more than 25 years at One Southwark Bridge Road. Property sources said the 150,000 sq ft offices and site could be worth up to £200m – or potentially more if Pearson achieved a long-held ambition of converting the prime riverside site into apartments. Reports suggest that Southwark council would only grant permission for flats if the FT stayed within the borough, although this situation could change with the newspaper in Nikkei’s hands. A soaring skyscraper is likely to be out of the question for the site building is in the capital’s "sight lines" restricting tall developments.