Pearson sells Economist stake for £469m

Pearson sells Economist stake for £469m

Pearson has agreed to sell its 50% stake in The Economist Group for £469m in cash, and is now “100% focused” on its global education strategy.

Investment company Exor has agreed to purchase 27.8% of The Economist Group's ordinary shares and all of its B special shares, with the remaining ordinary shares to be repurchased by The Economist Group.

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 transaction is subject to a number of regulatory approvals and to approval by both a 75% majority of The Economist Group shareholders and the group's independent trustees.

The transaction is expected to close during the fourth quarter of 2015.

Pearson said it would use the proceeds of the sale for “general corporate purposes and investment in its global education strategy”.

Last month Pearson sold the FT Group to the Japanese Nikkei Inc for £844m.

When Pearson and Bertelsmann entered an agreement to merge Penguin with Random House to create the world's largest trade publishing house in October 2012, a clause in the agreement said “under the terms of the agreement, neither Pearson nor Bertelsmann may sell any part of their shareholding in Penguin Random House for three years.” That date is up at the end of October 2015 in a few weeks time.  

Some commentators have suggested it is a matter of "when not if" Pearson will sell  its 47% stake in Penguin Random House if the company is intent on focussing only on its educational business.