British Publisher Set To Buy 2nd-Biggest Education House

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In the grandest example yet of consolidation in the educational publishing industry, the British owner of Addison Wesley Longman has agreed to buy the second-biggest K-12 educational house, Simon & Schuster, for $3.6 billion. Pearson PLC's combination of the two makes it arguably the world's dominant education business.

With the union, announced May 17, "you've got a new largest company," said Rick Blake, the vice president of the school division at the Association of American Publishers in New York City. The sale must be approved by federal regulators.

"For Pearson, they go from being a second-tier player in school publishing to being a first-tier player," added Peter P. Appert, an industry analyst for BT Alex.Brown Research in San Francisco.

A 'Natural Fit'

Observers said the merger of Simon & Schuster, owned by Viacom Inc., and Addison Wesley Longman brings together operations with both complementary strengths and competing interests.

Textbooks' Big Six
Following are the six largest K-12 educational publishers, based on market share:

1. MacMillan/McGraw-Hill
2. Simon & Schuster (Viacom)
3. Harcourt Brace (Harcourt General)
4. Houghton Mifflin
5. Addison Wesley Longman (Pearson PLC)
6. Scholastic

Note: Parent company in parentheses.
SOURCE: BT Alex Brown Research 1997.

Simon & Schuster is known for its K-12 imprints Silver Burdett Ginn and Prentice Hall School. The educational technology business Computer Curriculum Corp. is also part of that company. Addison Wesley Longman's school publishing group publishes materials under the Scott Foresman-Addison Wesley imprints.

One expert called it a "natural fit" for Addison Wesley, with more strength at the elementary level, to marry Simon & Schuster, which has strong secondary and college offerings.

But Bruce R. Vogeli, a professor of mathematics education at Teachers College, Columbia University, and a Silver Burdett Ginn author since 1960, said at least in elementary math, the two are major competitors--a fact that could change the textbook landscape.

Mr. Vogeli has written, edited, or consulted on 173 titles for Silver Burdett Ginn and has watched it change ownership several times. He said that, in general, consolidations of educational publishers limit the variety and innovation in a given subject area or grade level.

"Large publishing houses do not compete against themselves," he said. "And what is usually done is a division that is acquired is restricted in the types of products that it can produce in order that it not compete with sister divisions in the same group."

MTV to Madame Tussaud's

The sale shifts ownership of Simon & Schuster's education division from a media and entertainment giant on one side of the Atlantic to one on the other.

New York City-based Viacom also owns the Blockbuster video-store chain, the Paramount Pictures movie studio, and the MTV and Nickelodeon cable-television channels, among other properties. The company had announced in January that it would sell off the three publishing operations so that it could focus more on its core entertainment business. ("Entertainment Giant To Sell Textbook Division," Feb. 25, 1998.)

Among Pearson's holdings are the Penguin book publishing group, the Financial Times newspaper, and Madame Tussaud's wax museum in London. Pearson added HarperCollins Educational to its media empire in 1996.

Viacom plans to retain the Simon & Schuster name and its consumer-publishing division, which had a record-setting year in 1997.

Simon & Schuster's education division had operating profits of $210 million on unaudited sales of $1.4 billion last year, and Addison Wesley Longman had sales of $924 million with operating profits of $98 million, according to Pearson officials.

In this country, $7 billion was spent last year on printed and electronic education materials for the K-16 market.

Vol. 17, Issue 37, Page 5

Published in Print: May 27, 1998, as British Publisher Set To Buy 2nd-Biggest Education House
Web Resources
  • Read Pearson's press release on the acquisition of Simon & Schuster.
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