Japan's Nikkei buys Financial Times for $1.3 bn from Pearsons

Pearson Plc, the publisher of Penguin books, yesterday agreed to sell the 127-year Financial Times daily newspaper to Japanese media group Nikkei for $1.3 billion (£844 million).

It is the biggest acquisition by the Japanese media group, which had to outbid Germany's biggest news publisher Axel Springer AG.

The sale comes despite former Pearson CEO Dame Marjorie Scardino saying that the Financial Times would only be sold over her dead body. John Fallon, Pearson's current CEO acknowledge that the FT was ''integral to Pearson's commercial and strategic vision.''

Commenting on the sale, Fallon, said, ''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 will now be 100 per cent focused on our 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 added.

''I am extremely proud of teaming up with the  Financial Times, one of the most prestigious news organisations in the world,'' said Tsuneo Kita, chairman and group CEO of Nikkei. ''We share the same journalistic values.''

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), but does not include the London headquarters of the newspaper on the banks of the River Thames, and Pearson's 50 per cent stake in The Economist Group.

Speculation of a possible divestment of the respected financial daily has been in circulation for some years, and in 2012 it denied a Bloomberg report on the sale of the business (See: Pearson denies plans to sell Financial Times).

Founded in 1888 by James Sheridan and Horatio Bottomley, Financial Times' circulation across print and digital rose more than 30 per cent over the last five years to 737,000.

Pearson has been tackling a slowdown in its education business due to declining college enrollments in the US and falling textbook sales.

Armed with over $2 billion it received from 2010 asset sales, Pearson has been investing the money in strategic acquisitions, mainly in China, India, Brazil, Africa and the US.

It entered the English language-training market in China with the acquisition of two companies that cater to the needs of adults and school and college students. It also acquired China's Global Education and Technology Group, for $155 million in cash.

It has also invested in both acquisitions and organic growth in Brazil, Southern Africa and Nigeria.

In 2011, it purchased US online educational services company EmbanetCompass from an investor group led by Technology Crossover Ventures and Knowledge Universe, for $650 million in cash and acquired a controlling stake in Bangalore-based online education firm TutorVista for $127 million.

In 2013, it took full control of Indian vocational training company IndiaCan Education by acquiring Educomp's 50-per cent stake, for an undisclosed sum, and acquired Grupo Multi, an English-language training company in Brazil with over 800,000 students, for £440 million.

It has also invested in both acquisitions and organic growth in Brazil, Southern Africa and Nigeria.

Employee-owned 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. Group operations range from books and magazines to digital media, database services and broadcasting.

Its morning newspaper edition alone, which is Japan's equivalent of the Financial Times, has a circulation of 3.1 million.