Continuing the trend toward consolidation in the scholarly publishing community, John Wiley & Sons announced on Nov. 17, 2006, that it had entered into a definitive agreement to acquire the outstanding shares of Blackwell Publishing (Holdings), Ltd. The purchase price was set at £572 million (about $1.08 billion) to be financed with a combination of debt and cash. Blackwell Publishing's 2005 revenues were roughly £210 million ($380 million), comparable to Wiley's global scientific, technical, and medical (STM) business. The companies anticipate that the transaction will close in early 2007.
Blackwell, Ltd., the book library service and retailing business, is a separate entity and is not part of the acquisition. In a joint letter from the CEOs of Wiley and Blackwell Publishing to their customers, the case for the merger is presented as one of combining highly complementary programs and lists. The new merged organization will publish about 1,250 scholarly peer-reviewed journals (more than 1 million pages) as well as an extensive collection of books across the range of sciences, technology, medicine and health, social sciences, and humanities.
Blackwell Publishing has been the source of a long-running disagreement between Nigel Blackwell, Blackwell Publishing's chairman and largest shareholder, and his uncle Toby Blackwell, 73, who looked for a sale in 2002 to publisher Taylor & Francis, which had approached the group with an offer of £300 million. Nigel Blackwell appears to have made a wise decision in waiting; he is expected to personally net £240 million from the Wiley purchase, thanks to his 45-percent stake.
General reactions from individuals within the two companies and from knowledgeable industry experts point to a "happy marriage" of two highly compatible companies with "similar cultures." Members of both the Wiley family and Blackwell family are still active in their respective businesses and the general styles of the companies are seen to be highly similar—that is, focused on commitment to scholarship.
William J. Pesce, president and CEO of Wiley, described the deal as "a rare opportunity with highly favorable, long term strategic implications." For Wiley, the purchase can be seen to serve at least two ends—creating a combined company that will be too large to be swallowed up by others and also acquiring Blackwell's strong position serving the publishing needs of scholarly and professional societies and associations.
From the library perspective, the view is one of inevitability and hope for the best. Concerns have already been expressed on the Net regarding continuation of "big deal" terms, as well as avoidance of the general turmoil that has resulted from previous mergers, i.e., changes in customer service staff, senior management, etc. However, some consolidation of facilities and staff is to be expected since both firms now maintain offices in the U.S. and the U.K., as well as globally.
Wiley has announced that Rene Olivieri, CEO of Blackwell Publishing and a highly respected figure in scholarly publishing, will co-lead the transition team with Wiley's Steve Smith, senior vice president of international development and director of professional/trade publishing in Europe . A posting to the lib-license listserv on Nov. 20, 2006, directed to Wiley InterScience customers, is clearly meant to reassure the library community. The posting reads, in part:
"Blackwell and Wiley wish to assure their journal customers that this [merger] will have no effect on their 2007 orders. 2007 subscription prices will remain as announced and published in our respective price lists. Pricing for licensing online access to journals for 2007 is also unaffected. Wiley licenses will not include Blackwell journals and vice versa. All orders and inquiries should be sent to your usual contacts at each publisher."
Jim Mouw, assistant director for technical and electronic services at The University of Chicago, offered his opinion: "The Wiley Blackwell announcement can be seen as a natural continuation of the merger mania that has struck academic publishing. Their lists are fairly compatible, and the combined player should be a strong competitor. What remains to be seen is how the two companies' policies will be merged, and how our considerable investments in backfiles will be protected." Mouw noted that overall, he views the merger as "neutral."
At the recent Charleston Conference, held Nov. 8-11 in Charleston, S.C., both Blackwell Publishing and John Wiley had a strong presence. Indeed, Blackwell Publishing sponsored the conference bags for the 1,000-plus attendees who come each year to this conference to discuss scholarly publishing and collection development. No word of the impending purchase was heard from company representatives at the meeting. On the contrary, talk frequently turned to the approach by Springer to purchase the Informa Group, parent company of Taylor & Francis. By midconference, it was known that this particular approach had not succeeded.
However, as recently as Nov. 15, Information World Review's Phil Jones had reported confirmation of the offer from both Springer and Informa, noting that the "move is likely to have been made by Springer's principal shareholders—private equity groups Candover and Cinven" (http://www.iwr.co.uk/information-world-review/news/2168611/springer-leaps-informa). The article notes that "Publishing market analysts have predicted Informa would attempt to acquire Springer, not the other way round." Industry insiders agree with this last statement and have advised the market to basically "keep watching this space."
Good advice, indeed. Of publicly traded STM publishers, according to an EPS July 2006 Market Monitor report, based on 2005 revenues, "The five largest players (Reed Elsevier, Thomson, Wolters Kluwer, Springer, and Wiley) now account for over half (52.3 percent) of total market revenues." And that percentage is likely to be even larger by this time next year.
[ Editor's Note: Wiley has announced that it will host a Webcast on Thursday, Dec. 7, 2006, at 2:30 p.m. EST to provide a general business update and details regarding the upcoming planned acquisition of Blackwell Publishing. The live audio-visual management presentation will be accessible at http://www.wiley.com/go/communications. A replay of the Webcast will be accessible for 14 days afterwards.]