Financial Times staff “rejoiced” at the news that the Nikkei group would be their new owner, according to Ken Doctor of the Nieman Foundation. Lionel Barber, editor of the Financial Times, called his analysis “thoughtful and informed” in a Tweet so we can assume this is true. As Doctor points out, if the acquirer had been Bloomberg or Thomson Reuters or Dow Jones, then there would be immediate talk of synergies and integration, euphemisms for job losses and asset stripping. I am sure it will turn out to be no different to other Japanese acquisition processes I have been involved with, whereby the senior European executives are pleasantly surprised (and later, frustrated) by the lack of overt intervention by their new parent.
FT journalists are undoubtedly going to be worried by the perception that the Nikkei journalistic culture is more respectful and less investigative than the FT. Much has been made of how the FT broke the Olympus scandal first, and the Nikkei was slow to take it up. Of course the FT broke the Olympus scandal first because Michael Woodford contacted an FT journalist first (and that will, in any country, make other publications sniffy about touching it). Actually it was not the FT that broke the scandal, it was Facta magazine – a weekly which is outside the Japanese press club system, founded by a former Nikkei journalist who was frustrated that the Nikkei would not publish his investigative work. So yes, the Nikkei newspaper is the official front of Japanese business news, and benefits accordingly from previews of financials and ‘kite flying’ of new initiatives, in return for which it is not overly critical. However the Nikkei group is much bigger than just the newspaper – and has a whole range of magazines which heavily scrutinise the Japanese corporate and political world. It takes business and economics very seriously, and in that sense is a good fit for the FT.
The fact that the Nikkei was able to come in at the last minute with a significantly higher offer than Axel Springer shows that this was a long considered option by Nikkei executives. Yes, Japanese companies are notorious for being slow decision makers, but if the decision has been pre-cooked through discussions amongst a core group, they can move fast. This was the explanation I gave to Lehman MDs in one of the post integration seminars I delivered in an intense few weeks in 2008/9 and indeed it turned out that a group of executives at Nomura had been discussing the possibility of acquiring a major US institution for six years.
The FT and the Nikkei have been collaborating since 2013, covering licensing, syndication (there are always articles by the FT and Economist in the excellent weekly Nikkei Business magazine), events, China business etc. As a consequence, Doctor says the relationship between FT CEO John Ridding and Nikkei executives is better than that between FT executives and the CEO of Pearson.
Whether a multiple of over 40x earnings is excessive (and I recall during my MBA courses that earnings multiples were contemptuously dismissed as a way of valuing a company) is not going to be a key issue for the Nikkei, unless they end up heavily in debt or taking on onerous UK pension obligations, which does not seem to be the case this time.
Again, just like other Japanese acquisitions, this is going to be primarily about the Nikkei taking a bold move to address the lack of growth arising from a stagnating, maturing Japanese domestic market, and also a hope that the FT will provide the global jinzai (global human resources) and multinational management skills that Japanese companies feel they lack if they want to expand globally.
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