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Pearson sells stake in The Economist for £469mln

Published: 07:35 12 Aug 2015 BST

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The Economist has a circulation of about 1.6 million

Education publisher Pearson (LON:PSON) is selling its 50% stake in financial news magazine The Economist to the investment arm of the Italian family that founded car giant Fiat (now Fiat Chrysler).

Pearson is offloading a 27.8% holding in The Economist Group to Turin-based Exor Spa, which is controlled by the Agnelli family, for £287mln..

The Economist Group is repurchasing the rest of the shares Pearson owns for £182mln.

It follows last month's sale of the Financial Times Group to Japanese publishing group Nikkei for £844mln.

Pearson is disposing of its media interests to turn itself into an education publisher focused on learning materials in the US and elsewhere.

Analysts believe Pearson will also sell its 47% stake in book publisher Penguin Random House in its drive to target education.

As well as the magazine, which has a circulation of about 1.6 million, The Economist Group also includes Economist.com, the Economist Intelligence Unit, CQ Roll Call and TVC.

In 2014, The Economist Group contributed £21mln to Pearson's operating income and about 3p to adjusted earnings per share.

The deal, which is subject to regulatory and shareholder approval, is set to complete in the fourth quarter of 2015.

Pearson will use the cash to invest in its education strategy and for general purposes.

Pearson chief executive John Fallon said: "Pearson is proud to have been a part of the Economist's success over the past 58 years, and our shareholders have benefited greatly from its growth.

"Pearson is now 100% focused on our global education strategy."

After the deal and ‎The Economist's share buyback, Exor's shareholding in The Economist Group will increase from 4.7% to 43.4%.

Exor's chairman and chief executive John Elkann said: "By increasing our investment in The Economist we are delighted to affirm our role as one of the group's long-term supportive shareholders, along with the Cadbury, Layton, Rothschild and Schroder families and other individual stable investors.

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