For Thomson, the acquisition furthers its strategy of growth into electronic publishing and information services, and away from newspaper publishing, though it loses some ground in the STM market with Reed Elsevier's gain. [See the June 12, 2000 NewsBreak at http://newsbreaks.infotoday.com/nbReader.asp?ArticleId=17808.]

"This transaction is consistent with Thomson's strategy to be a major player in the global higher education and corporate and professional training markets," said Richard J. Harrington, Thomson's president and CEO. "These businesses will expand our portfolio of higher educational products and enhance Thomson's ability to provide electronic end-to-end learning solutions to our customers worldwide. Combined with our strong internal growth and the strategic acquisitions of Prometric and Wave Technologies completed earlier this year, this acquisition will transform Thomson Learning into one of Thomson's leading market groups, with revenues approaching U.S. $1.7 billion."

Commenting on the transaction, Reed Elsevier's chief executive, Crispin Davis, said: "The Harcourt STM and educational businesses are of outstanding quality in very attractive markets, and the strategic fit is excellent. The combination of our businesses provides an exceptional platform for growth, focused on new and demonstrably superior Internet information services and solutions. The acquisition of Harcourt transforms our position in schools education. The education market has a strong growth dynamic. The combination of Harcourt Education with Reed Educational and Professional Publishing is exceptionally well-positioned to drive new print and electronic product programs and to grow faster than the market. This acquisition represents a major step forward in our strategy announced in February." [See the February 28, 2000 NewsBreak at http://newsbreaks.infotoday.com/nbReader.asp?ArticleId=17835.]

The International Digital Electronic Access Library (IDEAL) is the online library of the Harcourt Worldwide STM Group. IDEAL is licensed in more than 20 countries by more than 1,600 academic institutions and industrial and pharmaceutical companies. IDEAL offers almost 250 journals published by Academic Press, W.B. Saunders, Churchill Livingstone, Bailliere Tindall, and Mosby. Academic Press publishes 174 peer-reviewed journals, with particular focus on life, physical, social, and computer sciences. Academic Press also publishes major reference works and databases.

According to the press release from Reed Elsevier, the immediate priorities will be the following:

• Integration of the Elsevier Science and Academic Press businesses
• Leveraging the combined science content and navigation tools to develop new, customized, online information services
• Integration of the worldwide medical businesses into one global operation
• Reorganization of the medical publishing business around key clinical disciplines and expansion of online information services and solutions

Derk Haank, Elsevier Science's CEO and a Reed Elsevier main board director, will manage the combined STM business.

According to reports in The Wall Street Journal, another group of investors had also bid for Harcourt, as well as the rival Dutch publisher, Wolters Kluwer. The Journal also noted that the Department of Justice is expected to take a hard look at potential antitrust problems in the proposed acquisition and could seek divestitures as a condition of approval.

Thus, this complex deal is not without controversy. The Association of Research Libraries (http://www.arl.org), which represents about 120 U.S. libraries, is seeking to block the sale because of concerns that it will raise the prices for journals and textbooks. The nonprofit organization plans to meet with the Department of Justice over the matter.

Elsevier Science has been the source of much criticism for its journal prices. Many titles cost several thousands of dollars per year (e.g., Cancer Letter is $3,995), and the often-mentioned Brain Research is now up to $17,444 for 1 year. The official 2001 price list on Elsevier Science's Web site (http://www.elsevier.com/homepage/about/subpricelist/pdf/Dollar2.pdf) notes that it has kept the increase in prices for print subscriptions to "less than 10 percent"—that's just for 1 year's increase!

The ARL's Office of Scholarly Communication (http://www.arl.org/scomm) has posted information on its site about topics of concern, including rising journal prices. One particularly revealing study is an ARL Report issued in December 1999 (http://www.arl.org/newsltr/207/jrnlprices.html), "The Impact of Publisher Mergers on Journal Prices: An Update." This details a study by Mark McCabe, assistant professor at the Georgia Institute of Technology's School of Economics and formerly an economist with the Department of Justice.

Duane Webster, executive director of ARL, said, "Every time there is a takeover by Reed Elsevier, the library community pays more for the product." ARL says that prices for scientific and technical journals have increased 11 percent a year and now average $974 for an annual subscription.

Mary Case, director of the Office of Scholarly Communication, said that another issue that ARL has concerns about is copyright. The organization is concerned that more and more content is concentrated in a company that has been supporting database legislation, UCITA (Uniform Computer Information Transactions Act), and restrictions on educational use in the electronic environment.

So, two rivals have agreed to buy another rival and split up the assets between them. Some are calling it a strange-bedfellows story; others call it one of the largest and most important publishing deals this year. This is big-time wheeling and dealing—the potential stakes in both the education and STM markets are enormous. Those of us covering the continuous stream of mergers and acquisitions in the information industry see the number of players in specific markets shrinking as rival companies combine forces, and smaller companies are forced to sell. Stockholders may like this, but will customers?