Japanese readers of the key financial newspaper Nikkei Keizei Shimbun, woke Friday to the front page news that parent group Nikkei Inc. had agreed to pay $1.32 billion for the U.K.’s Financial Times.
The move is billed by Nikkei Inc. as major move in the internationalization and digitization strategy that it has already been pursuing.
While the high price of the deal was immediately noted by some commentators — Nikkei Inc. is paying some five times what News Corp. paid five years ago for the Wall Street Journal — the company is privately owned and does not have to bow to short-term stock market concerns. The price also reflects Japanese investors’ preference for the highest quality brands and assets.
Furthermore, the two companies have cooperated for 20 years, know each other well and see plenty of opportunity for joint business development.
“The deal is a response to the digitalization and internationalization challenges faced by the world’s media,” the Nikkei Keizei Shimbun wrote today. “We aim to evolve into a global media group by integration of the two companies, covering Asia and the West.” It said that it expects demand for financial news to increase, and that the English-language brand will help. Nikkei in turn is expected to help the Financial Times expand within Asia in news, database services and indexes.
Both newspapers give their names to the leading stock market benchmarks in their home countries, with the Financial Times responsible for the FTSE or ‘Footsie’ index of 100 leading stocks in the U.K., and the Nikkei Keizei Shimbun giving rise to the Nikkei 225 index of leading Japanese firms.
The editorial pointed out that both the Nikkei newspaper and FT have built successful online businesses. While FT.com has long been a pioneer of paid news services, Nikkei was slower and launched its online service only in 2010. It said today that it has 43 million monthly users, with 2.32 million free registered users.
In 2013 Nikkei Inc. launched its own English-language magazine, the Nikkei Asian Review. That replaced its previous English-language operations, nikkei.com and Asia Weekly.
The FT was owned by Pearson and its corporate predecessors since the 1950s and was held as an arms-length asset, which guaranteed the Financial Times’ editorial independence. Now, in the same way the WSJ’s takeover by News Corp. was queried, questions are inevitably being raised about the FT’s editorial integrity — especially as as Nikkei Inc. seeks to harness the FT’s brand and digital strength for global expansion.