NewsWire: Vivendi Said to Be in Talks About Acquiring Houghton - New York Times
By DAVID D. KIRKPATRICK and SETH SCHIESEL
Vivendi Universal of France is in preliminary talks to acquire Houghton Mifflin, the venerable United States publishing house, people close to the discussions said yesterday.
People involved in the talks said they were in very early stages and could still collapse. A price has not been settled on, they said.
Spokeswomen for both companies declined to comment.
The discussions were reported yesterday in The Wall Street Journal, which put the price under discussion at $1.7 billion. A deal would continue the consolidation of the educational publishing business in the United States as well as the trend toward ownership by conglomerates based outside the country. The talks also underscore a principal factor behind the mergers, the high cost of technology. Many educational publishers are investing heavily in plans to use software and the Internet for teaching and testing, and they are seeking to grow to be able to afford the development costs.
Houghton Mifflin, founded in 1832 and based in Boston, is one of the last stand-alone educational publishers in the country. It is the smallest of four companies that dominate the business of publishing textbooks for elementary and high schools, behind the New York-based giant McGraw- Hill Companies, the British media company Pearson, and Harcourt General, based in Newton, Mass. Harcourt General's acquisition by the British-Dutch conglomerate Reed Elsevier and the Canadian publisher Thomson for $4.5 billion is awaiting final regulatory approval.
Houghton Mifflin now draws about 70 percent of its revenue from elementary and high school educational publishing. In addition, the company publishes some college textbooks, a small but prestigious list of general interest fiction and nonfiction including the novels of Philip Roth and J. R. R. Tolkien, and a catalog of reference books like the American Heritage Dictionary. Houghton Mifflin also has a standardized testing division and in recent years has invested significantly in online educational services through a partnership with Sylvan Learning Systems.
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