News Corp, a global, diversified media and information services company, announced that it will acquire Harlequin Enterprises from Torstar Corporation for C$455 million in cash (or about $414,843,065 in U.S. dollars). The closing is expected to be completed by the end of the third quarter of calendar year 2014, subject to standard closing conditions, including regulatory approvals and approval of Torstar’s Class A shareholders. Harlequin will become a division of HarperCollins Publishers, a News Corp subsidiary headquartered in New York and one of the world’s largest English-language publishers. Harlequin will remain headquartered in Toronto.
“We are thrilled to welcome Harlequin’s management and staff in Toronto and around the world to the HarperCollins family,” says Brian Murray, president and CEO of HarperCollins. “The Harlequin name and rich heritage will be preserved independently, with the aim to leverage capabilities to bring the book-reading public more choices.” Harlequin, too, see benefits to the move, which allows it “to take full advantage of HarperCollins’s robust resources, scale, and capabilities to expand the reach of our books and grow our business,” says Craig Swinwood, Publisher and CEO of Harlequin.
Harlequin is a leading publisher of women’s fiction, and HarperCollins sees Harlequin’s acquisition as a complement to its current business, allowing it to expanding in a significant area of publishing. In addition, because Harlequin issues titles worldwide in 34 languages and sells into 102 international markets, its acquisition is expected to expand the global reach for all HarperCollins titles, particularly in Europe and Asia. While some 40 percent of Harlequin’s revenues are derived from books published in languages other than English, HarperCollins derives 99 percent of its revenue from titles in that language, and HarperCollins will gain immediate access to 11 new countries with the purchase. Finally, the deal is expected to push expansion of digital platforms for both companies and thus “provide an immediate lift to earnings,” says Robert Thomson, chief executive of News Corp.
“I have no idea how it will all fall out, but I think this is a good move—and I usually hate mergers and acquisitions,” says Kristin Ramsdell, Library Journal’s romance columnist. “[The HarperCollins division] Avon is primarily known for its historicals, and Harlequin’s focus is mainly on contemporaries, so they do complement each other.” Ramsdell doesn’t see HarperCollins collapsing and absorbing any of Harlequin’s imprints, as can happen with mergers and acquisitions, because they are too well known and loved by romance readers. She does wonder, though, whether Harlequin’s historical line might become part of Avon’s, and she suggests that Harlequin’s Love Inspired lines might refresh Avon’s output. No announcements have been made yet regarding structure or personnel, and time will tell how romance authors and readers might benefit from the deal. But for now one big New York house just got bigger.