Japanese media company Nikkei has agreed to buy the FT from education company Pearson for £844 million ($1.3 billion) at a time when media companies globally are going through unprecedented upheaval.
Pearson has long signalled its intention to focus on education, its core business. The company had previously denied interest in selling the asset, with former chief executive Dame Marjorie Scardino famously saying the highly regarded financial newspaper would only be sold "over my dead body".
Prior to the deal being struck, there was speculation that German media company Axel Springer would buy the British publication. In the end, however, the Financial Times brand landed in the hands of Japan's Nikkei.
“But as the FT reports every day, digital disruption is changing every industry and nearly every aspect of business at accelerating speed. News media remains at the centre of this upheaval and faces intensifying competition,” he added.
"We sustain our success thanks to our editorial independence, the quality of our journalism, to our position as a globally-minded news organisation based in London at the centre of the global financial marketplace, and to the profitability which underwrites that editorial independence," he said.
The sale includes the FT newspaper, FT.com, How to Spend it and other specialised publications including MandateWire and The Banker. It does not include FT Group’s London property at One Southwark Bridge and Pearson’s 50% stake in The Economist Group.
As of June 30, FT Group had gross assets of approximately £250 million.
FT's total circulation across print and digital rose more than 30% over the last five years to 737,000, with digital circulation growing to represent 70% of the total, up from 24%, and mobile driving almost half of all traffic.
For its part, Pearson has been steadily disposing assets not related to its education business. In 2013 it sold Mergermarket, which runs subscription-based M&A and debt publications to London-based private equity firm BC Partners for £382 million.
With the sale of FT the company completes its core business-focused strategy.
“In this new environment, the best way to ensure the FT’s journalistic and commercial success is for it to be part of a global, digital news company,” said John Fallon, Pearson’s chief executive in a release. “Pearson will now be 100% focused on our global education strategy,” he added.
Pearson's drive to be a pure education company conflicted with the investment needed to run a media company, a point FT executive Ridding alluded to in the memo.
"Pearson is now firmly focused on being the world's best learning company...The FT is the leader in quality global journalism," said Ridding in the memo. "In an age of specialisation, it is very hard to ride two horses and win at both," he added.
FT group is the second major media company to be sold to an Asian buyer in recent times. Last year Forbes was sold to Hong Kong-based Integrated Whale Media Investments, which comprises investors including Hong Kong businessman Tak Cheung Yam and Singapore-based entrepreneur Wayne Hsieh, the co-founder of PC vendor ASUSTek Computer.
Nikkei Inc, the largest independent business media group in Asia, runs the flagship newspaper Nikkei, which has about three million subscribers. It also runs three specialised papers --Nikkei Business Daily, Nikkei MJ (Marketing Journal) and Nikkei Veritas, a financial weekly. Its overseas network spans 36 bureaus across the world with over 230 staff.
Evercore, Goldman Sachs and JP Morgan Cazenove advised Pearson on the FT transaction. Rothschild advised Nikkei. The transaction is subject to a number of regulatory approvals and is expected to close during the fourth quarter of 2015.
Additional reporting by Julie Zhu