From huge to really huge

James Evelegh's editorial from this week's edition of InPubWeekly.

By James Evelegh

From huge to really huge

Informa this week gobbled up UBM to create a mega new £9bn B2B publishing and events business. Unsurprisingly, UBM shares went up 12% on the news, though Informa’s went down 6%.

Informa Chief Executive Stephen A Carter said: “It is clear that the B2B Market is moving to Operating Scale and Industry Specialisation. The Combined Group will have the reach and market capabilities to take full advantage of these trends.”

The FT reported that the move will help Informa build its scale in the exhibitions business and that UBM has a strong presence in Asia, where Informa has been looking to expand.

One wonders how much more scale a company needs. Before the deal, Informa was valued at £6bn, hardly a minnow. What kind of business opportunities are beyond the reach of a £6bn company?

The Standard reported that the acquisition will cost hundreds of head office jobs, which seems likely, and it’s a pity if the deal results in fewer people working in the events and publishing space, not more.

What might have been the concerns that prompted the fall in Informa’s share price? Is the company now oversized? How nimble and agile can such an enterprise be in today’s fast-moving environment? Are investors concerned about overreach, perhaps recalling previous publishers like Emap and Johnston Press who went on acquisition sprees only to eventually be broken up or slimmed down?

Of course, we wish the new venture well, especially in global markets, however I do hope that the new super-size Informa does not become too dominant. A diverse and dynamic publishing eco-system is what we want, with lots of players, some of which will have the scale to compete globally.

Hopefully, this acquisition will turn out to be good for the industry as a whole, and not just UBM shareholders.