Financial Times to be sold to Nihon Keizai Shinbun Corporation (株式会社日本経済新聞社, Nikkei Inc.)

Financial Times to be sold to Nihon Keizai Shinbun Corporation (株式会社日本経済新聞社, Nikkei Inc.)

Nikkei won the race. Axel Springer withdrew. £ 94 million made the difference.

by Gerhard Fasol

On July 23, 2015 at 15:13 (3:13 pm) British Summer Time, Pearson and Nihon Keizai Shinbun Corporation announced the sale of the Financial Times Newspaper to Nihon Keizai Shinbun Corporation for £ 844 million (approx. US$ 1.3 billion) – sending shock waves around the global news industry.

FT: £ 94 million made the difference.

The Financial Times reported that Germany’s Axel Springer Verlag had offered £ 750 million in cash, but within the last 5 weeks Nihon Keizai Shinbun Corporation (Nikkei) quickly closed the acquisition with a 12% higher cash offer of £ 844 million, while Axel Springer withdrew. So it seems that in the end £ 94 million made the difference.

As a privately held company, Nihon Keizai Shinbun Corporation can act faster, and has far less constraints than the publicly traded Axel Springer Corporation.

Clearly in the best case, this acquisition will help Nikkei Inc to globalize and to bring Japan’s financial news and scoops via Financial Times to Western audiences, and vice-versa, and help both to learn from each other to speed up and expand the transition from paper to new digital business models.

Cultural issues and language issues: for effective cooperation, Financial Times leaders will need to learn Japanese and/or Nihon Keizai Shinbun leaders will need to learn much more English….

Writing news is an intensely intellectual activity. There will be interactions between Nikkei’s almost 100% Japanese reporters and Financial Times’ much more diverse creators. Given that almost zero of Financial Times’s staff speak any Japanese, and that knowledge of English language by Nikkei’s creators and editors is extremely limited, these interactions will be necessarily very limited, and will need intense efforts to expand. As you know, learning Japanese for Western people, and learning English for Japanese people is extremely difficult, especially at the level of writing compelling news to short deadlines and for some of the world’s most clever and demanding audiences – who are always able to defect to a Bloomberg terminal or to a news startup – or from this autumn to Apple-News.

Success of this acquisition is possible and could bring great benefits, but is by no means guaranteed.

Much has been written about editorial independence, separation of content creation vs advertising, and differences in editorial style and aggressive reporting between Financial Times’ aggressive London style vs Nikkei’s more obedient Tokyo style. Surely both can learn from each other!

Note also that the acquisition is subject to “regulatory approval”, and this may well impose conditions on the acquisition.

The context?

Nikkei’s acquisition of Financial Times follows on the heels of a long series of acquisitions in Europe by Japan’s advertising and media giant Dentsu. Given the business relationships between Nikkei and Dentsu, these may also have impact on The Financial Times, allowing The Financial Times to sell more advertising via Dentsu.

Another issues of course is, who did NOT acquire the Financial Times: Bloomberg seems to have not been involved, and Axel Springer seems to have withdrawn.

Nikkei Inc is not Japan’s largest media group – there are several much larger Japanese media groups, including the Yomiuri Shinbun group – the world’s largest newspaper group. Will they follow?

The Economist next?

It has been reported, that Pearson is currently also in the process of selling Pearson’s shares in the iconic Economist Group. Following the Financial Times acquisition by Nikkei which has been conducted low profile, we can expect much more participation in a potential Economist sale.

Pearson only owns 50% of The Economist, the remainder is owned by Families (Cadbury, Rothschild, Schroder, Agnelli and others) and Economist staff and former staff.

The Economist is governed by:

  • Trustees:
    • Baroness Bottomley of Nettlestone
    • Lord O’Donnell
    • Tim Clark
    • Bryan Sanderson
  • Board of Directors of 12 people

Therefore The Economist’s government structure enables The Economist’s independence, and acquiring Pearson’s 50% will not allow control of The Economist in the way acquiring 100% of Financial Times does.

How big is Nikkei? 6 times larger circulation than Financial Times! Larger than New York Times + Wall Street Journal combined!

Nihon Keizai Shinbun (Nikkei) has substantially larger distribution than  Wall Street Journal, New York Times or Financial Times
Nihon Keizai Shinbun (Nikkei) has substantially larger distribution than Wall Street Journal, New York Times or Financial Times

Japan’s media sector is very very large, and so is Nihon Keizai Shinbun Corporation.

Nihon Keizai Shinbun Corporation is best known in the west for the NIKKEI index, however this is only a very small part of Nihon Keizai Shinbun Corporation. At the core of Nihon Keizai Shinbun Corporation (Nikkei Inc) is the Nihon Keizai Shinbun (= Japan Economics Newspaper, Nikkei), which appears twice daily, and in terms of circulation is very much larger than New York Times, Wall Street Journal or Financial Times:


  • Nikkei: 2.77 million (morning) + 1.39 million (evening) + 0.43 million (digital) = 4.59 million
  • WSJ: 1.463 million (paper) + 0.734 million (digital) = 2.2 million
  • NYT: 0.868 million (paper) + 0.91 million (digital) = 1.8 million
  • FT: .225 million (paper) + .504 million (digital) = 0.73 million

Thus, Nikkei’s circulation is larger than WSJ + NYT combined, or more than 6 times larger than Financial Times’.

However, Nikkei is clearly behind in the transition from paper to digital.

Financial Times, 1/4 the size of the Nikkei Corporation in terms of sales

The Financial Times was founded on January 9, 1888.

Financial Times Group sales have increased from around £ 400 million (approx. US$ 620 million) in 2010 to around £ 450 million (approx. US$ 700 million) in FY 2013.

Nihon Keizai Shinbun Corporation (株式会社日本経済新聞社, Nikkei Inc.)

Nihon Keizai Shinbun Corporation (株式会社日本経済新聞社, Nikkei Inc.) was founded on August 11, 1911, but goes back to the newspaper ChuugaiBukkaShinpou (中外物価新報) which started on January 27, 1889, almost exactly one year after the Financial Times was founded.

Nihon Keizai Shinbun Corporation has the Nihon Keizai Shinbun (日本経済新聞) as its core, but owns and operates a very large number of other publishing and media businesses, including also a 31.46% holding in Televi Tokyo Holdings, one of Japan’s major TV based media groups.

  • Consolidated revenues: YEN 300.6 billion (US$ 2.4 billion) (FY2014)
  • Operating income: YEN 16.7 billion (US$ 0.135 billion) (FY2014)
  • Net income: YEN 10.26 billion (US$ 0.08 billion) (FY2014)
  • Employees: 7319 (Dec 31, 2014)

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