In a well-kept secret for the usually gossipy media industry, Time Inc. has agreed to buy American Express’ luxury publishing division, which includes Food & Wine, Travel + Leisure and Departures. The price of the sale, expected to close in Q4, wasn't disclosed.
The sales talks were prompted by rules that required AmEx, as a bank holding company, to exit noncore businesses. Banking regulations limit AmEx’s ability to work in nonbanking activities.
Rumors of the deal began surfacing over the summer, and the news began leaking out just as Joe Ripp took over as CEO of Time Inc. The talks began under Ripp’s predecessor Laura Lang, who held the job since January 2012.
Time Inc. is a natural home for AmEx Publishing; the two companies have had a management services agreement since 1993. Under the agreement, the parties collaborate on cross-title integrated marketing programs, and AmEx benefits from Time Inc. expertise, resources and relationships. As it happens, Ripp helped craft the management services agreement in his earlier tour of duty at Time Inc.
AmEx Publishing has benefitted from a strong climate for luxury advertising. For the January-September period, ad pages across all five of its titles is up 6 percent versus the year-ago period, per the company. Once part of the Time Inc. fold, the titles will report to Evelyn Webster, head of Time Inc.'s Lifestyle Group. AmEx said the titles' business relationship with AmEx cardholders (some of whom receive the magazines as a benefit of membership) will remain unchanged.
Questions about AmEx’s future surfaced earlier in the year when Time Inc. was in talks to sell to Meredith Corp., which doesn’t have a strong history of luxury publishing. Those talks fell apart, though, and Time Warner ended up deciding to spin off Time Inc. as a separate company. The spinoff is expected to be completed early next year.
Here's Ripp's memo to Time Inc. staff announcing the deal:
I am delighted to let you know that after a 20-year strategic relationship, American Express Publishing—including its leading luxury lifestyle titles such as Travel + Leisure and Food & Wine—will become part of the Time Inc. family.
Later today, we will announce our agreement to acquire Amex Publishing from American Express. After the transaction closes, Amex Publishing will report into Evelyn Webster, Executive Vice President and Group President of our Lifestyle Group.
Having served on the Amex Publishing advisory board for a number of years in the past, I have great respect for CEO Ed Kelly and the business he and his team have built. I am very excited about the possibilities for expanding these world-class brands, along with the rest of our portfolio, as we prepare to become an independent company.
This transaction has been in the works for several months, and you’ll be hearing more about how it will unfold in the coming weeks. Today, please join me in welcoming the American Express Publishing team to Time Inc.