Japan's Nikkei buys Financial Times in $1.3 billion deal

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Pearson Sells the Financial Times to Nikkei

Japanese media group Nikkei agreed on Thursday to buy the Financial Times from Britain's Pearson (PSON.L) in a $1.3 billion deal that brings together two of the leading financial news operations from Europe and Asia.

The deal marks the biggest acquisition by a Japanese media organization and is a coup for Nikkei, an employee-owned firm which also lends its name to the main Japanese stock market index.

In the Financial Times it has acquired a title that was established in 1884 and which was first printed on pink paper in 1893 to stand out from rivals. It has been owned by Pearson for nearly 60 years.
With a reputation for first-class analysis and breaking news, it was one of the first newspapers to charge for its content online and has coped better than most newspapers with the transition to digital publishing.

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

The Nikkei newspaper, which has a circulation surpassing 3 million for its morning edition alone, enjoys a must-read reputation for financial and business news in Japan but has struggled to break out of its home market.

The paper, with its deep ties to corporate Japan, has also faced criticism for running earnings "previews", which are considered to be leaks, days ahead of corporate results at a time when Prime Minister Shinzo Abe's government has been pushing for greater corporate transparency.

As the news broke of the Nikkei deal, an FT journalist tweeted a photograph showing staff in their newsroom crowded around a television watching the developments.

According to tweets from journalists who were addressed by the paper's management, FT Editor Lionel Barber told staff the deal "was not and is not a shotgun marriage", saying there had been hours of conversation.

BOLT FROM THE BLUE

The name of Nikkei came out of the blue.

Analysts and bankers had for years been waiting for Pearson to sell the trophy asset, although the names most closely linked with a deal were financial data terminal providers Bloomberg and Thomson Reuters (TRI.N), parent of Reuters news agency.

A person familiar with the situation had also recently told Reuters that Germany's Axel Springer (SPRGn.DE) was working on a buyout and a spokeswoman confirmed that the group had held talks about a deal.

Reuters reported earlier on Thursday that the 171-year-old Pearson had finally decided to sell the business daily as it expanded more into education.

That had sparked furious speculation as to who could be the buyer, with the FT itself initially reporting that Springer was in the lead, before Pearson and Nikkei confirmed their deal.

The sale of the FT Group is expected to close during the fourth quarter of 2015 and does not include its 50 percent stake in The Economist magazine or the London headquarters of the newspaper on the banks of the River Thames.

"It is hard to argue with the price," said Richard Marwood, senior fund manager at AXA Investment Managers, a shareholder in Pearson.

Pearson, founded in 1844 as a small building firm in Yorkshire, northern England, was once one of the world's largest building contractors and has had a long list of varied interests from banking and publishing to owning theme parks and Madame Tussaud's waxworks.

The sale will leave Pearson as the world leader in education publishing and the owner of a 47 percent stake in the Penguin Random House book publisher.

(Additional reporting by the London newsroom; Kevin Krolicki and Ritsuko Ando in Japan; Editing by William Schomberg, Giles Elgood, David Stamp and Peter Graff)
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