LONDON — Education business giant Pearson is to sell its 50% stake in The Economist Group for £469 million ($731 million). The group’s chief asset is The Economist, the weekly magazine about business and politics. Founded in 1843, the magazine has a circulation of around 1.6 million.
Italy’s Exor, which is one of Europe’s leading investment companies and is controlled by Fiat founders the Agnelli family, will purchase 27.8% of The Economist Group’s Ordinary shares for £227.5 million ($354 million), and all of the B special shares for £59.5 million ($92.6 million). Pearson’s remaining Ordinary shares will be repurchased by The Economist Group for £182 million ($283 million).
Following the transaction, Exor’s stake in The Economist Group will rise from 4.7% to 43.4%.
John Elkann, chairman and chief executive of Exor, and a non-executive director of The Economist, commented: “We have always admired the editorial integrity and thoroughly global outlook that are the hallmarks of The Economist’s success and we fully subscribe to its historic mission to ‘take part in a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress’.”
The deal is subject to the approval by both a 75% majority of The Economist Group shareholders, who include members of the Cadbury, Layton, Rothschild and Schroder families, and its independent trustees.
John Fallon, Pearson’s chief executive, said: “Pearson is proud to have been a part of the Economist’s success over the past 58 years, and our shareholders have benefited greatly from its growth. We have enjoyed supporting the company as it has built a global business, sustaining the excellence of its journalism and ensuring it is read more widely. We wish all our colleagues at The Economist every future success.
“Pearson is now 100% focused on our global education strategy. The world of education is changing rapidly and we see great opportunity to grow our business through increasing access to high-quality learning globally.”
The Economist deal, which is expected to close during the fourth quarter of this year, follows Pearson’s decision last month to sell the Financial Times group to Japanese business publisher Nikkei for £844 million ($1.32 billion).