U.K. to Examine Reed-Harcourt Deal

Reed Elsevier's purchase of Harcourt General will not be completed in the first quarter of 2001 as expected, the Anglo-Dutch publishing giant Reed said last week. The announcement followed word that the U.K. minister for competition and consumer affairs has referred the proposed acquisition to the U.K. competition commission for further investigation. Minister Kim Howells said the combination of Reed and Harcourt raised concerns over market power in scientific, technical and medical journals in Britain.

Analysts had always expected that Reed would be forced to sell some properties before the merger would be approved, but the announcement from the British government threatens to drag out the completion of the deal for several more months. The competition committee has until May 28 to complete its investigation of the acquisition that was first announced last fall (News, Oct. 30, 2000). Reed said it's still committed to completing the merger, and the company's CEO Crispin Davis said, "We remain convinced that we have a strong case in support of our acquisition of Harcourt.... We look forward to explaining the merits of the acquisition to the commission."

Earlier this month, Reed announced that it was once again extending its tender offer for Harcourt, this time from February 8 to February 28, to accommodate the regulatory review process. Another extension is possible.