French Publisher To Purchase Grolier
The largest publishing company in France, Hachette S.A., has arranged to purchase Grolier Inc., the American publisher of encyclopedias and other educational materials.
The $449-million agreement announced last week will make Hachette the world's third-largest publisher, after Bertelsmann A.G. of West Germany and Simon & Schuster Inc. of the United States.
It also marks the latest development in a growing pattern of international consolidation in the publishing industry.
In February, a British conglomerate partly owned by Rupert Murdoch bought the Addison-Wesley Publishing Company. Last year, Mr. Murdoch also bought Harper & Row Publishers Inc.
Another British publisher, Robert Maxwell, made an unsuccessful bid last year for Harcourt Brace Jovanovich Inc., one of the largest American textbook companies.
Grolier, based in Danbury, Conn., ranks third in sales of encyclopedias in the United States. The company owns the New Book of Knowledge, the Encyclopedia Americana, and the Academic American Encyclopedia.
It also markets educational books through several book clubs, including the Beginning Readers' Program, Disney's Wonderful World of Reading, the Popular Science Book Club, and Outdoor Life Book Club.
Under the terms of the merger, Hachette will purchase 95 percent of Grolier's 19.5 million outstanding shares at $24.25 per share. Hachette first bid $21 a share, or $415 million, for Grolier, nearly $5 above the level at which the company's stock was trading. When the company's board rejected the offer, the French firm increased its bid.
Hachette last week also paid $712 million to purchase Diamandis Communications Inc., the publisher of Women's Day, Popular Photography, and other consumer magazines. That deal made the company the world's largest magazine publisher.
The Paris-based company now publishes the international fashion magazine Elle, as well as Paris Match magazine and a new French edition of Fortune. It is also involved in the radio, television, film, and advertising industries and publishes a small number of textbooks.
Hachette executives have indicated that the company is interested primarily in Grolier's encyclopedia business. Officials of the French firm said they had agreed to sell a Grolier division, Childcraft Education Corporation, to the Walt Disney Company for $52 million. Childcraft sells toys, play equipment, and classroom furniture by direct mail.
The new owners have said they will retain Grolier's top management, including its chairman and chief executive officer, Robert B. Clarke.--KG