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Lessons from an acquisition

Lessons from an acquisition

What FT takeover means for Japan and Asia 

by David Marsh

Mon 27 Jul 2015

A lot of the commentary on the announced takeover of Britain’s Financial Times newspaper by Japan’s Nikkei media company has focused on issues of editorial control and style. However we need to look at the £844m acquisition from a wider perspective.

It may be too early to see the move as the beginning of a gradual rise in Asian influence over English-language international business media. This sector is firmly in the clutch of well-entrenched Anglo-American information groups. They seem unlikely to abandon their hold any time soon. But, just as Asian banks and financial companies make greater inroads into western markets, it would be logical to expect more Chinese, Indian, Singaporean and Malaysian capital – as well as Japanese – to be deployed in international business media in coming years.

Nikkei’s brand of corporate journalism is frequently said to restrain its journalists’ readiness to highlight impropriety or shortcomings on the Japanese economic and financial scene. Pundits ask how this will fit with the FT’s more freewheeling approach, quintessentially English, yet indubitably irreverential. Rather than abrupt change, a process of osmosis looks likely. The respectful Nikkei will move (slowly) in the direction of the FT’s more swashbuckling style, rather than vice versa. And the FT will considerably boost its often patchy coverage of Asia. Readers everywhere will benefit.

The takeover gives some clues about what is happening in Japan. A combination of circumstances – including the longer-run effects of the 2011 earthquake, a shrinking population, rivalry with China, and Prime Minister Shinzo Abe’s attempts at revitalising the economy – are inducing Japan to open up to the rest of the world in different ways.

Despite a fall in the current account surplus, the country remains by far the world’s largest net creditor – and wishes to deploy its assets more widely and more wisely. It needs to pay more attention to importing skills and technology and to internationalising the yen further (not least to attract more foreign capital on to the Japanese bond market as and when Japanese yields rise). Promoting the 'Japanese story' in a different and better way may accompany a rise in the yen’s attractiveness as a reserve currency, as the euro retreats in international significance and the renminbi gains prominence. In all these seminal shifts, some of which will take time fully to emerge, the Nikkei-FT acquisition will find a place.

Globalisation over the past 30 years has coincided with an inexorable ascent of English as the lingua franca of finance and economics. This has provided a powerful international boost to a diverse group of media companies with strong business coverage, whether the BBC or CNN, New York Times or CNBC, Wall Street Journal or The Economist, Bloomberg or Thomson Reuters. The FT stands out in this list as a relatively small company embedded in a group – Pearson – which over the past 20 years has turned away from media. From this point of view, Pearson was right to sell to the highest bidder that would guarantee the newspaper’s editorial independence.

After paying a rich price, Nikkei will not tarnish the value of the brand by shackling its new acquisition with Japanese paternalism. Further internationalism, not parochialism, will be the answer. In the rollcall of global business media with classic Anglo-American (and perhaps increasingly Asian) credentials, the Nikkei-FT Group will carve out a more than honourable niche.

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