Monday, May 05, 2008

Pearson Buying Language School

Only 1% of Pearson's revenue is generated in China and they like many other companies hope to improve on that percentage in one of the fastest growing markets in the world. The company is in the process of acquiring a chain of private language centers in Shanghai which will leverage some of the language teaching product the company publishes through Longman. Several newspapers are reporting on the acquisition (which isn't completed). From The Telegraph:
The FTSE-100 media group is near to finalising a deal to buy LEC, a group of 15 Shanghai private schools, The Sunday Telegraph has learned. The deal, likely to be announced this week, underlines Pearson's aim to expand its Chinese operations as the country's economic growth presents opportunities for foreign companies. Demand for English language tuition is at an all-time high in mainland China as a result of the country's continuing integration into the global.
Pearson has been buying educational assets aggressively in the US for several years; however, they have not purchased schools per se. In China, they may be considering a more expansive expansion across the entire education value chain from content creation to delivery. In other developed Asian markets such as Korea and Japan, private education plays a significant role in the education of Children and a similar structure is developing in China. For Pearson to participate in that market development only makes sense.

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