HarperCollins owner News Corp is to buy the consumer division of Houghton Mifflin Harcourt (HMH) in a $349m (£252m) deal.
The acquisition will see HMH Books & Media operated by HarperCollins Publishers in the US, and is expected to close in the fourth quarter of 2021, pending regulatory approval.
News Corp said HarperCollins expected $20m in cost savings from the deal over the next two years, including manufacturing, distribution and other efficiencies. “HarperCollins also anticipates revenue synergies by leveraging its global scale and further expanding licensing opportunities,” it said.
The company added it was acquiring “one of the most extensive and successful backlists in the publishing industry”, including George Orwell's Animal Farm and Nineteen Eighty-Four, plus The Lord of the Rings trilogy, which HarperCollins only had rights to in the UK and Commonwealth. In 2020, 60% of the division's $191.7m net sales came from backlist.
HMH Books & Media also a productions business which repurposes its popular brands across media platforms. The acquisition also includes the firm's children’s and Young Adult divisions, which publishes titles like Curious George, Martha Speaks, Five Little Monkeys, The Polar Express and The Little Prince.
News Corp c.e.o. Robert Thomson said: “There is a resurgence in reading and listening to books, and we believe the brilliant HMH Books & Media backlist and first-rate frontlist have an enduring and increasing value. Timeless writing is a timely source of revenue and the potential to create highly profitable audio and video works flourishes with each passing digital day.
“The HarperCollins collection will be bolstered for children and young adults, and authors around the world will have a larger platform for their creativity and ingenuity. It is crucial to expand in an era in which emerging monopolies threaten the creative marketplace, so we welcome J R R Tolkien, Virginia Woolf, George Orwell and many, many other distinguished writers to HarperCollins.”
Brian Murray, president and c.e.o. of HarperCollins Publishers, added: “Combining HMH Books & Media’s strong catalogue with HarperCollins’ global platform will allow for increased investment in HMH Books & Media’s trade programmes and we expect faster growth of the combined companies at a time of rapid growth in book consumption. Joining HMH Books & Media’s media productions team and the HarperCollins Children’s global catalogue will open up new animation and gaming opportunities as we look to accelerate the expansion of our IP across multiple formats.”