Financial Daily from THE HINDU group of publications
Saturday, Mar 15, 2003
Mergers & Acquisitions
Corporate - Mergers & Acquisitions
Living Media set to take over Reader's Digest in April
MUMBAI, March 14
COME April and the Indian Reader's Digest will be a part of the India Today group.
The royalty issue, which had been delaying the deal for months, has finally been thrashed out, said officials close to the negotiations.
The American parent, Reader's Digest Association Inc, is believed to have been demanding a royalty of 12 per cent of the annual turnover of the publication while the present owners of Reader's Digest, the Tatas, pay a royalty of five per cent.
The annual turnover of the monthly, with a print order of 5.06 lakh copies in India stands at Rs 25 crore.
At present, the Union Government approval is awaited for the takeover to be effective, said the sources. Every foreign publication requires a stamp of approval from the Information & Broadcasting Ministry.
A Tata company, RDI Print & Publishing, has owned Reader's Digest in India since 1979 under a licence granted by the US parent.
The price discussions for the publishing business have reached the final stages between the Tatas and the Living Media group. Only paperwork remains for the change of management, said the officials.
With the new acquisition, Living Media will have one more international publication under its umbrella apart from Cosmopolitan and the recently acquired Golf Digest, an international golf magazine.
Asked whether the change of management will alter things in Reader's Digest, officials at Living Media said, "Reader's Digest is a very successful product and we would not like to change anything at the start. We will first learn the strategies of the product and then decide on whether any changes are required. At the same time, group synergies and group resources can certainly add to the strength of the group company."
It remains to be seen whether the editorial content of the largest circulated monthly in the world will be altered under the new management. "This would depend on how much freedom the American parent has granted the new owners," said senior officials. Currently, only a mere 10 per cent of the content in the Indian Reader's Digest is from India.
The manpower of Reader's Digest is to remain intact and lean at 57. With retrenchment ruled out, all employees have been asked to resign and join the new company in April once the new owners take over. The salary of the employees is likely to remain the same or may increase, the officials said.
The Living Media group, feel officials, might take up the direct mail model more earnestly. Reader's Digest worldwide has demonstrated the power of direct mail, with 80-90 per cent of its sales through subscriptions.
Globally, Reader's Digest sells 23 million copies across 60 countries in 48 editions and 19 languages and is the world's largest selling magazine. The Indian edition constitutes a small fragment of the $2.4-billion Reader's Digest Association Inc.
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line