Italian firm Exor, controlled by the Agnelli dynasty, has become the biggest shareholder in the owner of the Scots-founded the Economist news magazine after Pearson yesterday agreed to sell its 50 per cent stake.
The £469 million deal comes just weeks after the UK publishing group said it was offloading the Financial Times to Japan’s Nikkei for £844m, and will see the Economist move out of its headquarters in a prime location of central London.
Pearson is selling the publications as part of plans to focus on its vast education publishing business and said it would use the proceeds of the sale to invest in this strategy.
It acquired its stake in the Economist in 1957 as part of its purchase of the FT, which had owned half of the magazine since 1929. Its history dates back to 1843, when it was founded by Scottish businessman and banker James Wilson to further the cause of free trade.
Now one of the world’s best-known weekly business and current affairs publications, it has a circulation of around 1.6 million. The wider Economist Group also includes a website and other operations including an “intelligence unit” providing business analysis.
Last year, the group contributed £21m to Pearson’s operating income. The deal is subject to approval by regulators, shareholders and the group’s independent trustees, and is expected to complete in the final quarter of this year.
Pearson chief executive John Fallon 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.”
The Economist said the deal would see new measures to safeguard its editorial independence.
Group chairman Rupert Pennant-Rea said: “We have been blessed over many years to have had in the Financial Times and subsequently Pearson a shareholder that understood and supported the ethos of the group.
“With their decision to sell, the board’s priority was to secure the independence of the ownership of the group and the continued editorial independence of the Economist.
“The transaction has the full support of the board, the trustees and the current editor of the Economist as well as her surviving predecessors.
“The board is also pleased to welcome Exor, an exemplary shareholder for the past six years, in its new role as the anchor investor in the group.”
Exor already owns a small stake and will directly pay £287m to increase its holding. The remainder of the shares will be purchased by the Economist Group for £182m, effectively increasing the stakes of existing investors.
This will be partly financed by the sale of the office complex it owns, which includes its headquarters, in the St James area of central London – valued at around £150m.
The deal will leave Exor as the biggest shareholder with 43 per cent. The sprawling €13 billion (£9bn) conglomerate has major investments in businesses across the world including car maker Fiat Chrysler. The Agnellis also control Turin’s Juventus football club.