LONDON, UK – British publisher Pearson on Thursday, July 23, said it had agreed to sell its salmon-pink business newspaper the Financial Times to Japanese media group Nikkei for £844 million ($1.31 billion, 1.2 billion euros).
Pearson said it was selling the FT Group, which includes FT.com. But the deal does not include FT Group's 50-percent stake in The Economist magazine, or the London offices where the paper is based.
"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," Pearson's chief executive John Fallon said in a statement.
"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 the sale should be completed later this year.
The Financial Times was founded in 1888 and has become a paper of reference for the global business community with five editions covering Britain, Europe, US, Asia and Middle East.
Tsuneo Kita, chairman and group CEO of Nikkei, said he was "extremely proud of teaming up with the Financial Times, one of the most prestigious news organizations in the world".
Nikkei Inc., publisher of the Nikkei business daily, employs more than 3,000 people and says is the largest independent business media group in Asia.
The Nihon Keizai Zhimbun – or Nikkei daily – became Japan's financial newspaper of reference after the Second World War and has a track record of financial scoops.
The FT's editor since 2005, Lionel Barber, explained the decision at a staff meeting in the paper's headquarters on the south bank of the River Thames close to the City of London.
"It's been a difficult process," Barber was quoted as saying by Peter Spiegel, one of the FT journalists present. Barber reportedly added: "I just want to be clear this was not and is not a shotgun marriage."
The announcement came hours after the paper itself reported that Pearson was more advanced in its talks for a sale with German media group Axel Springer newspaper group than with Nikkei.
The paper later cited two sources as saying that Axel Springer only found out that its year-long bid to buy the paper had fallen through 15 minutes before the sale to new bidder Nikkei was announced.
Pink paper appeal
The Financial Times has a combined paid print and digital circulation of 720,000, much of which is via its popular subscriber-only FT.com website.
"The FT has made one of the more successful adaptations to the web, driven by its ability to sell online subscriptions based on its unique information," said Steve Schifferes, professor of financial journalism at London's City University.
"This subscription base also provides advertisers with the ability to reach high-value individuals," he told Agence France-Presse.
"However, it still faces challenges from the large number of free business news websites, and its paywall may limit its future growth, compared to new web-based rivals."
The widely-respected business daily was purchased by Pearson in 1957.
The FT's European edition first hit the printing presses in Frankfurt in 1979. The paper is now printed all over the world, including in New York, Tokyo, Hong Kong and Dubai.
The paper has been printed on distinctive salmon-pink paper since 1893.
The FT.com website – which now accounts for 70 percent of total circulation – was launched in 1995.
The newspaper's digital subscriptions overtook print circulation in 2012, while mobile – tablets and smartphones – now account for about half of FT.com traffic.
'Not a good fit'
Pearson, which earns 90 percent of sales from its education division, had previously denied persistent speculation that the FT was for sale.
"Rumours have been circulating for a while about a possible sale of the FT, which is not a good fit with the rest of Pearson's business," said Schifferes.
FT education products serve two-thirds of the world's top business schools, according to Pearson.
Shares in Pearson closed 2.07 percent higher at 1,234 pence on London's benchmark FTSE 100 index, which was down slightly by 0.18 percent overall. – Roland Jackson and Ben Perry, AFP/Rappler.com