Re: Libraries Urge Justice Departmen to Block Cinven and Candover Purchase of BertelsmannSpringer

[Mary Case <marycase@arl.org>]

John,

Cinven and Candover's new money and management practices are not at issue
in our objection to this transaction.  There is a history of price
increases resulting from previous mergers.  We have no reason to believe
that this particular sale will be any different.  Cinven and Candover have
paid a premium for a property and will need to earn a return on their
investment.  This will not come through increased efficiencies alone.

We don't see how this deal will challenge Elsevier.  In fact, if the new
Springer does raise prices, it will provide Elsevier with incentive to do
the same.  It will, however, hurt libraries and small publishers.

Mary

**************************************************
Mary M. Case
Director, Office of Scholarly Communication
Association of Research Libraries
Suite 800
21 Dupont Circle, NW
Washington, DC  20036
202-296-2296 x112
202-872-0884 (fax)
marycase@arl.org
**************************************************


John Cox wrote:

> This appears to me to be a rush to judgement without any thoughtful
> analysis of the impact of the creation of a group with the resources to
> become a significant competitor to the otherwise sole 'super power' in
> journal publishing.
>
> Cinven and Candover are private equity companies.  Their investment in our
> industry is new money.  It creates a new group that otherwise would have
> been acquired, piece by piece, by existing publishing giants.  I know
> Cinven from their time as principal owner of Routledge, of which I was a
> director in the mid-1990s.  Their stewardship of Routledge was marked by
> financial insight and by allowing the professional publishing management
> simply to get on with the job of publishing books and journals.  They
> offered advice, but they were always willing to listen and be corrected.
> They were a model owner.  And the same individuals are involved with
> Kluwer/Bertelsmann Springer.
>
> The process of concentration in scholarly publishing in the last ten years
> has been incestuous.  Publishers have bought other publishers.  This
> acquisition represents new investment and creates diversity which would
> not exist if one of the other bidders had succeeded.
>
> John Cox
>
> John Cox Associates
> E-mail: John.E.Cox@btinternet.com