The new venture will be the world's largest professional and scientific publishing and information group, with a strong presence in North America, Europe and the Asia Pacific region and approximately 42,000 employees worldwide. The deal is expected to go through within the first half of 1998.
Pro forma sales for the new combine for the year ended December 31 1996 would have been $6.6bn, the two companies claim.
Commenting on the proposed merger, Cornelis Brakel, chairman of the executive board of Wolters Kluwer and chief executive elect of the merged businesses says: "The proposed creation of a new force in the publishing and information industry will bring together two leading global publishers to create a business comprising outstanding publishing brands."
Nigel Stapleton, co-chairman of Reed Elsevier and co-deputy chief executive elect of the merged entity, says: "The new combination will be a dynamic force in markets where scale will be critical to help our customers take advantage of market and technological changes."
The strategy of the combined businesses will focus on: providing branded, high-quality targeted information to scientific, professional and business communities; concentrating on market segments where the new company can achieve market leadership; exploiting technology as an instrument to increase significantly the efficiency and effectiveness with which customers access information.
The proposed merger will be effected by a statutory merger of Elsevier and Wolters Kluwer. Elsevier shareholders will retain their shares in Elsevier, to be renamed Elsevier Wolters Kluwer NV. Holders of Wolters Kluwer shares will receive new shares in Elsevier Wolters Kluwer in exchange.
The existing Reed and Elsevier dual holding company structure will apply to the new combine. The two holding companies, Reed and Elsevier Wolters Kluwer, will maintain separate London and Amsterdam stock exchange listings.
The new venture will operate as a unified business through two principal operational holding companies with identical boards of directors, one of which will be the existing Reed Elsevier plc which will be renamed and the other will be a new Dutch operational holding company.
After the merger, the boards of Reed and Elsevier Wolters Kluwer will investigate the possibility of simplifying the structure by setting up a single operational holding company in the Netherlands, which would be the preferred operating structure.
Brakel will be chief executive of the UK holding company and chairman of the executive board of the Dutch holding company until the Annual General Meetings of their parent companies in 2001. He will be based in Amsterdam.
Brakel will also be chairman of the executive board of Elsevier Wolters Kluwer.
Copyright October 1997, Crain Communications Inc.