FRANKFURT (Reuters) - The publisher of science magazines Nature and Scientific American is merging with private equity-owned peer Springer Science+Business Media to make it easier for them to compete with heavyweight rivals.
Germany’s Holtzbrinck, which owns Nature publisher Macmillan Science and Education, will combine the majority of its activities with BC Partners’ Springer unit, which publishes scientific, technical and medical books and journals.
Holtzbrinck will hold 53 percent in the joint company, with BC Partners holding the rest, the companies said on Thursday.
The enlarged group will have 1.5 billion euros ($1.75 billion) in annual sales and 13,000 employees.
The merger will make it easier for them to compete with the likes of Reed Elsevier, Wolters Kluwer and ThomsonReuters.
Publishers are moving into digital content as readers increasingly use smartphones and tablets as their source of information.
To shoulder these investments publishers are setting up joint ventures. Bertelsmann and Pearson in 2013 merged Random House and Penguin, to reap cost synergies.
“The main benefit by merging is you have more bargaining power when you speak with universities and more journals to bundle,” said Liberum analyst Ian Whittaker.
BC Partners aims to eventually divest its holding in the merged publishing business entirely, BC Partners Managing Partner Ewald Walgenbach said.
“The most likely exit will be an IPO. However, that is still at least 2-3 years away,” he said.
He added that while the group may pursue small acquisitions the focus will be on internal growth, especially in the so-called open access business - the internet-based access to professional information.
Springer Science Chief Executive Derk Haank will head the new merged company and Macmillan Science and Education Chief Executive Annette Thomas will serve as Chief Scientific Officer.
“The expected economies of scale will allow for additional investments in new product development,” Haank said.
The deal is expected to close in the first half of 2015.
Macmillan’s English language school books and social sciences publisher Palgrave Macmillan will be part of the merged entity, as will Springer’s publications and data for professionals including Germany’s AerzteZeitung and the Journal of Happiness Studies.
Holtzbrinck’s investments in IT and software businesses, its consumer books unit Macmillan Publishers and its U.S. higher education business will not be part of the transaction.
Springer Science is a separate company from German publisher Axel Springer, while Holtzbrinck Publishing is a different company than Dieter von Holtzbrinck Medien.
($1 = 0.8536 euros)
Reporting by Arno Schuetze and Harro ten Wolde; Editing by Maria Sheahan and Elaine Hardcastle