Unfriendly skies? - Reed International PLC replacing American executives in publishing corporations with European executives - Brief Article

As we went to press, Reed International was finalizing its deal to buy the Official Airlines Guide from the bankrupt Maxwell Communication Corp. for about 425 million. The acquisition will give Reed Elsevier nearly worldwide monopoly on the travel index category, since Reed already owns the ABC World Airways Guide in Britain. ordinarily, such a deal would be greeted with great joy in Newton, Massachusetts, home of Cahners Publishing (a subsidiary with yearly revenues of $800 million plus). But don't bet on it

Cahners' stature within Reed International may actually be diminished. The OAG folks may be a little nervous as well.

Even though the United States has been targeted for expansion by Reed Elsevier, and more and more profits will be derived from here, the shifting power blocs within this media giant so far don't seem to be favoring American executives. Earlier this year, R.R. Bowker and Martindale Hubbell directories were shifted from Reed Publishing USA (which controls Cahners) to Reed Telepublishing, headed by British-born CEO Ian Thomas. The directories were good for $150 million a year in revenues as well as about $50 million in operating profit.

Also, Cahners, $42 million-a-year medical division was shifted to the Elsevier wing. Robert Brawn, the top American executive, was suddenly out of a job. Except for a one-year period under late CEO Ken Nelson, Elsevier USA has been controlled by executives from the Netherlands. As far as we know, there is only one American on the Reed Elsevier board--Robert Krakoff, the head of Reed Publishing USA.

But it remains to be seen if the Americans who are helping them generate the profits are awarded high corporate positions. Or will the shots be called in London (Reed's HQ), or Amsterdam (Elsevier's HQ)? Until further notice, it looks like the latter two will hold sway.

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