INDONESIA

The Financial Times was just sold to Japan’s Nikkei

One of the business-media world’s most-persistent rumors has finally come true: the Financial Times has been sold. The business newspaper’s owner, Pearson, confirmed the sale to Japan’s Nikkei Inc., for £844 million ($1.3 billion) in cash.

Speculation over the sale hit a fever pitch this week, with the FT itself reporting earlier today (paywall) that Germany’s Axel Springer was the preferred buyer. Earlier rumors also put Bloomberg and Thomson Reuters in the frame for the paper founded in 1888.

But it’s the Japanese who won the day. For their cash, they get an outlet that last year generated £24 million in operating profit on £334 million in sales. The premium of 35 times earnings is bullish to say the least. It’s not far off from the price at which an analyst pledged he would “eat my hat” amid speculation earlier this week.

The FT has a paid circulation of 737,000, with 70% of subscribers paying for digital access and mobile devices accounting for “almost half” of all traffic. It makes more from selling content and services than from advertising, Pearson says. The deal does not include the FT’s 50% stake in The Economist magazine, which will remain with Pearson.

Nikkei’s flagship newspaper boasts a circulation of about three million. It counts over 400,000 paying subscribers to its online edition. The FT purchase marks the latest step in a several-year plan to make the company’s coverage, and its reach, more global. In late 2013, it launched the Nikkei Asian Review, an English-language website and weekly magazine devoted to analytical and enterprise news coverage from Asia. Last month it took over sponsorship of the closely-watched purchasing managers’ indexes in 10 Asian countries.

Business news is dominated by English-language news outlets, a Nikkei executive explained to Quartz just before the Nikkei Asian Review was launched, and those outlets are mostly US- and UK-owned and focused. The business world needs more Asian perspective, he said. The Review’s website bills itself as “the only business publication that brings you insights about Asia, from the inside out.”

“Together, we will strive to contribute to the development of the global economy,” Nikkei boss Tsuneo Kita said of today’s deal.

The Financial Times has already worked with Nikkei via syndication and education tie-ups, and Nikkei has long had an arrangement to translate and publish Financial Times content in Japanese. The Japanese group last year bought a stake in the UK-based lifestyle magazine Monocle, run by longtime FT columnist Tyler Brûlé.

For Pearson, the sale gives it a clear focus on the education and textbook market, which comprises the vast majority of its £5 billion in annual revenue. After 60 years as the owner of the FT, an “inflection point in media, driven by the explosive growth of mobile and social” convinced CEO John Fallon to sell the group. “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.

Pearson’s shares jumped up by nearly 3% after it confirmed the disposal talks, and have stayed up throughout the sales saga. (No offense, FT hacks!)

—Additional reporting by Heather Timmons in Hong Kong.

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