“Global demand for books – print and digital – has never been higher,” said Brian Murray, president and chief executive officer of HarperCollins Publishers, in a statement. “We expect the combined companies to grow faster at a time of rapid growth in book consumption.”
Education publishers have not done so well as school closings in the United States are a critical source of income. Education publishers’ revenue fell 10.9 percent in 2020, the Association of American Publishers found.
Houghton Mifflin, the largest learning technology company in the K-12 market, saw sales decline last year due to a sharp drop in the Education department, despite strong sales in the consumer publishing business.
“Last year and to this day, the pandemic really disrupted K-12 education,” Jack Lynch, president and chief executive of Houghton Mifflin, said in an interview. “It was a compulsory mechanism for the rapid adoption of technology.”
The company put its business publishing division on sale last fall to focus on its core businesses, educational publishing and technology, and to pay off its debt. The deal is expected to close in the second quarter of 2021.
Erik Gordon, a professor at the University of Michigan’s Ross School of Business, said the deal could potentially strengthen both companies. The sale of its specialist publishers will enable Houghton Mifflin to strengthen its position in the education sector, while HarperCollins will receive around 7,000 titles, including Tolkien’s trilogy “The Lord of the Rings”, which Amazon is adapting as a TV series.
Gordon cautioned, however, that increased consolidation in the publishing industry, unlike mergers and acquisitions in other industries, could have an unforeseen cultural ripple effect.
“It’s not that I’m paying an extra dollar for a book, it’s that control over the arena of ideas is limited,” he said. “When the variety of ideas, when the venues narrow for people who want to challenge the mainstream ideas, then besides something that costs me a dollar more, we’re talking about something completely different.”