After a two-decade-long relationship between the magazine giant Time Inc. and American Express, Time Inc. plans to close quickly on its purchase of American Express’s publishing division.
“This 20-year courtship is finally being consummated in matrimony,” said Ed Kelly, president and chief executive of the American Express Publishing Corporation. He joked in a phone interview that after such a long engagement, there was no reason to delay the wedding; Time says it expects to close the deal by Oct. 1.
On Tuesday, both companies announced that Time Inc. would buy for an undisclosed sum all of American Express’s publishing titles, which include Food Wine and Travel Leisure along with magazines sent to selected American Express card members, like Departures and Black Ink. Time Inc. is adding these magazines to its lifestyle group, with magazines like Sunset, Real Simple and Southern Living.
American Express and Time Inc. have worked together since 1993 through a management services agreement that let them team up on advertising and back-office deals. More recently, the two companies worked on a marketing campaign for the hotel chain Westin that involves Time Inc. magazines like Fortune and Real Simple and American Express magazines like Food Wine and Travel Leisure.
Since 2008, when American Express changed its status to a bank holding company, it has been constrained from engaging in any businesses that are considered nonfinancial activities. That has prevented its magazines from experimenting with new sources of revenue as its competitors have.
“With how the media business is transforming itself and the regulatory environment we have been dealing with at American Express, the clock was kind of ticking for us to decide what way we wanted to go,” Mr. Kelly said.
For the past year, board members from both companies, including John Hayes, chief marketing officer for American Express, and Howard Rosen, senior vice president for Time Inc.’s finance operations, have been discussing the purchase.
Time Inc. has undergone its own internal turmoil in recent years. Laura Lang, who was hired as Time Inc.’s chief executive in December 2011, was involved with the early negotiations. Then in March, Time Warner announced that it planned to spin off its struggling Time Inc. magazine division into a separate publicly traded company and that Ms. Lang would resign.
Joe Ripp, a former Time Warner executive who rejoined the company after Labor Day as Time Inc.’s new chief executive, worked on the final details. But there shouldn’t be too much of a cultural adjustment for both sides. Mr. Kelly noted that he started his career at Time Inc.’s People magazine.
Mr. Ripp was also involved in creating the 1993 management agreement between Time Inc. and American Express. He said in a statement about the purchase “we know their business well.”
