Thomson Announces Strategic Realignment of Operations
In addition to recently announcing its intention to sell the Thomson Learning businesses, Thomson Corp. also intends to realign its remaining operations. In an effort to carry out its long-term strategy of delivering mostly electronic products and services, it will reorganize its remaining operations into six Strategic Business Units: North American Legal, Financial, Scientific, International Legal and Regulatory, Tax and Accounting, and Healthcare. These six units will be supported by a corporate centre, and will eliminate the current market group structure (Legal and Regulatory, Learning, Financial, and Scientific and Healthcare). Thomson Corp. currently offers information products and solutions to healthcare, financial, legal, scientific, and tax and accounting professionals.
The Globe has a good article by Richard Blackwell in today’s business section: Thomson pulls trigger on sale of $5B division. From what the analysts are saying, part of the change is to allow them to focus on the electronic side:
“The underlying business strategy [at Thomson] is to shift from traditional print-type products into electronic information services,” said Paul Bradley, an analyst at Toronto brokerage Fraser Mackenzie Ltd. “The Learning division was the least able to make that transition.”
Does anyone have any insight on which product lines might be affected? traditionally held materials in Canadian law libraries that we might be seeing a new vendor for?
Most of what concerns us is in their Legal and Regulatory division, so is not being sold.
It is the Thomson Learning division that is slated to be sold, which includes Thomson Gale and (in Canada) Thomson Nelson as per this page:
Thomson Learning Businesses & Brands
For me the disconcerting thing is not that they are selling Thomson Learning, but that it sounds like their focus here on in is going to be on electronic products and they are trying to get out of paper products. They haven’t given any specifics about this, but from the article:
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Mr. Harrington hinted something was afoot at a presentation in October, when he said bluntly that the company would consider divesting any business that didn’t fit the firm’s strategy and was not “performing at the level that we would expect them to perform.”
He emphasized that all the company’s funds must be spent on “high-growth, high-profit areas.”
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The needs of customers don’t seem to be anywhere in their vision.
What’s significant here is the recognition that the future lies in electronic information in high price-tolerant markets. Educational publishing, especially in large print runs is always at mercy of Ministries of Education, school boards and textbook selectors.
When Thomson’s predecessor started the Eagan plant, they had excess print and binding capacity and general educational textbook production made sense.
But Thomson was never committed – as say McGraw Hill had been – to education as one of its primary markets.
This is simply rationalizing the business around the most profitable engines.
This could get interesting. Thomson Nelson is one of the three largest educational publishers in Canada. Nelson, like other Thomson units, has grown considerably by acquisition of smaller Canadian-owned firms, most recently the Edmonton based company Duval House. As Slaw readers are no doubt aware foreign acquisition of Canadian publishing companies is not allowed under the Canada Investment Act (this is why we were able to snatch Irwin Law from clutches of LexisNexis).
There are no Canadian publishers with the kind of resources it would take to purchase Nelson. Will the Harper government abandon the Mulroney era foreign investment rules? And even if they do, it seems to me that a deal to add Nelson’s considerable market share to that of either Pearson or McGraw Hill (the other two big educational players) would create a near monoply.
Ah! That will be interesting, Jeff. Thanks for explaining this.