Slaughters leads Harcourt clearance

Camerons gives way to magic circle firm after Simpson Thacher tip

Slaughter and May has scooped a victory for US publisher Harcourt General before the Competition Commission after being drafted in by US firm Simpson Thacher & Bartlett.
The £3.2bn acquisition of Harcourt by Anglo-Dutch rival Reed Elsevier was referred to the commission in February. After a five-month consultation, the takeover has now been allowed to proceed. The transaction makes Reed the world's leading publisher of medical and scientific journals.
Slaughters had not acted for Harcourt before the commission's interest.
Until the commission interrupted the proceedings, CMS Cameron McKenna had been representing the US publisher. The referral came from Harcourt's US adviser Simpson Thacher. Partner Michael Rowe said his firm's late arrival was both beneficial and problematic.
His team had little time to get to grips with a complex and unusual market, but its relative freshness allowed it to challenge orthodox approaches to the problem. He said: “We weren't so involved that we hadn't reached any fixed views about how the case could be presented.”
The acquisition had already passed through a US Department of Justice review, clearing the merger in its jurisdiction. The commission in this country was obliged to give due respect to these findings.
Those opposed to the takeover complained that if the commission found in favour of the transaction, a rise in the cost of journals was inevitable. The combined company's share of the academic journals market is expected to be about 15 per cent. About 40 per cent of sales are to government institutions such as universities and research bodies.
Rowe said it was fundamental to a successful outcome that the grievances voiced by the academic community be separated from the overall impact to the consumer. The commission concluded that, although there were aspects of the deal that prompted concerns, they did not lead to the assumption that the merger would operate against the public interest.
The deal has now been cleared, but with reservations. The commission has asked the Director-General of Fair Trading to consider whether a wider review of the scientific, medical and technical (SMT) publishing market was necessary.
Under the deal, Reed will acquire Harcourt, and while retaining its SMT and education groups and elements from its corporate and professional services group, it will sell what remains to Thomson Corporation.
Reed was advised by a Linklaters & Alliance team headed by Tony Morris.