Business
Pearson will sell its 50% stake in the Economist. Britain's Pearson brought an end to its near 60-year ownership of The Economist on Wednesday, agreeing to sell its 50 percent stake in a deal that makes Italy's Agnelli family the largest shareholder in the weekly title, reports Reuters. The 469 million pound ($731 million) deal had been expected after Pearson sold the Financial Times newspaper last month to Japan's Nikkei to focus on its education business. The Economist, a famously opinionated advocate of free markets, said the deal would be structured in such a way as to guarantee its editorial independence.
Pearson said it would sell its stake to Exor, a holding vehicle for the Agnelli family, and to The Economist Group. To finance the purchase The Economist, founded in 1843, said it would sell the Economist building in London's exclusive St James's district, its home since the 1960s.
The Economist writes: A change in ownership is an important event for any newspaper, even The Economist, whose editorial independence is absolute and is fiercely guarded by four independent trustees. We are confident that this transaction, which is subject to the approval of our shareholders and is only the second significant change of ownership in our 172-year history, will serve this newspaper and its readers well. A responsible and engaged minority shareholder will increase its stake; The Economist Group has used its strong balance-sheet to reinforce the company’s commercial independence. New safeguards are being drawn up to place extra limits on the influence of any individual shareholder and to allow us to raise more equity capital should we wish to do so. At a time when truly independent journalism is all too rare and often under threat, we are strengthening ours—and, in doing so, are improving our ability to serve our readers in future.
The background against which this change of ownership takes place is the digital transformation of the newspaper industry. Mobile technology and the rise of social media offer unprecedented opportunities to reach new audiences in new ways. But they are disrupting business models and spawning new digital competitors.
