Holtzbrinck Publishing Group and BC Partners announced January 15 an agreement to merge Springer Science+Business Media with the majority of Holtzbrinck-owned Macmillan Science and Education — namely Nature Publishing Group, Palgrave Macmillan and the global businesses of Macmillan Education. This announcement is the first major industry consolidation since John Wiley & Sons bought Blackwell Publishing prior to the Great Recession of 2008.
According to Dan Strempel, senior analyst, business professional group at Simba Information, the deal would create a clear No. 2 player in the STM and scholarly market. Currently, Springer, John Wiley and Wolters Kluwer all hover at just over $1 billion in annual STMS revenue. Together the new Nature Springer group would have $1.42 billion. Elsevier is the clear market leader with more than $3.3 billion in annual revenue.
In STM journal publishing, six companies control 40 percent of the revenue generated worldwide. This merger reduces that number to five companies: Elsevier, Springer-Nature, John Wiley & Sons, Informa (Taylor & Francis) and Wolters Kluwer. In this business, economies of scale are important to attract new journals to publish on behalf of professional and scholarly societies, but also to increase the breadth and "must-have" nature of a publisher's Big Deal journal package for academic libraries.
Upon completion of the transaction, the new group will be under joint control of Holtzbrinck and funds advised by BCP with Holtzbrinck retaining a 53 percent share. Published reports indicate that BCP intends to sell its 47 percent stake, possibly through an initial public offering, in the next few years. The transaction is subject to approval by various competition authorities, which is expected in the first half of 2015.
