“Global demand for books — print and digital — has never been higher than it is now,” Brian Murray, the president and chief executive of HarperCollins Publishers, said in a statement. “We expect faster growth of the combined companies at a time of rapid growth in book consumption.”
Educational publishers haven’t fared as well, as the closing of schools across the United States cut off a critical revenue stream. Revenue for educational publishers fell 10.9 percent in 2020, the Association of American Publishers found.
Houghton Mifflin, the largest learning technology company in the kindergarten-through-12th-grade market, saw its sales fall last year because of a steep drop in its education division, though sales in its consumer publishing business were strong.
“Last year, and still to this day, the pandemic has really disrupted K-12 education,” Houghton Mifflin’s president and chief executive, Jack Lynch, said in an interview. “It was a forcing mechanism for the rapid adoption of technology.”
The company put its trade publishing division up for sale last fall, as it aims to focus on its core business of educational publishing and technology, and to pay down its debt. The deal is expected to close in the second quarter of 2021.
Erik Gordon, a professor at the University of Michigan Ross School of Business, said the deal could potentially strengthen both companies. By selling its trade publishers, Houghton Mifflin can strengthen its position in education, while HarperCollins will gain some 7,000 titles, including Tolkien’s “The Lord of the Rings” trilogy, which Amazon is adapting as a TV series.
But Mr. Gordon cautioned that unlike mergers and acquisitions in other industries, growing consolidation in publishing could have an unforeseen cultural ripple effect.
“It’s not that I’ll pay a dollar more for a book, it’s that control of the arena of ideas gets limited,” he said. “If the variety of ideas — if the venues for people who want to challenge the mainstream ideas — narrows, then in addition to something costing me a dollar more, we’re talking about something entirely different.”