Starting a New Chapter

By John Greenwald

Macmillan agrees to pay $15 million in stock for Scribner

As large book companies have snapped up smaller ones in recent years, the once sedate world of publishing has been changing as fast as the plot of a Dickens novel. Last week two of the oldest and most prestigious publishers added a new chapter to the merger story. Macmillan (founded 1869) said it will pay about $15 million in stock for Scribner Book Companies, a closely held firm whose imprints include Charles Scribner's Sons (1846) and Atheneum( 1959).

The purchase, to take effect in June, is part of a recent merger mania by Macmillan (1983 sales: $430.5 million), whose businesses include the Katharine Gibbs secretarial schools and the Berlitz language instruction programs. Macmillan last year acquired six companies, including three educational publishers. The latest takeover will strengthen Macmillan in such areas as children's books, reference works and college texts.

Excluded from the deal is Scribner's 71-year-old, Beaux-Arts-style bookstore on Manhattan's Fifth Avenue. Said Chairman Charles Scribner Jr., 62, the great-grandson of the company founder: "The family has run the bookstore almost as long as the book publishing company, and I would be brokenhearted if we were not able to maintain it. We will strive to continue to do so."

Finding it increasingly hard to compete with larger rivals like Doubleday, the Scribner chairman last fall suggested the merger to Macmillan. "It came to father as a natural match that had eluded us in past offers," recalled Executive Vice President Charles Scribner III, 33. "He felt Macmillan would be the platonic ideal for a match and approached them as if to say, 'We could be very happy together. We should consider getting married.' "

For Scribner, whose authors have included Ernest Hemingway and F. Scott Fitzgerald, the takeover will mean access to Macmillan's cash and marketing muscle but an end to the corporate independence of a firm that has helped to shape American literature. Wrote Hemingway in a 1947 letter after the death of Maxwell Perkins, his longtime Scribner editor: "One of my best and most loyal friends and wisest counselors in life as well as in writing is dead. But Charles Scribner's Sons are my publishers and I intend to publish with them for the rest of my life."

The takeover, which both sides said will preserve Scribner's editorial freedom, is part of a consolidation trend that began in the late 1970s. Among previous acquisitions have been Hearst's takeover of William Morrow, and the purchase of J.B. Lippincott by Harper & Row.

Such deals have aroused fears of a shrinking market for authors. Jeremiah Kaplan, executive vice president of Macmillan, sought to calm such worries: "This merger will not diminish the number of books being published by all our companies. In fact, they may well be increased. We admire the books that Scribner does so well. That is, after all, one of its attractions." --By John Greenwald. Reported by Richard Brims/New York

With reporting by Richard Bruns