Dow Jones and Pearson (Xetra: 858266 - news) announced Friday plans to sell their stakes in the Russian daily Vedomosti, opening the way for a local businessman to consolidate control of the few critical voices left in the Moscow press.
The agreement will see Russia's last liberal daily be put completely under Russian control and will make it more vulnerable to Kremlin (LSE: 0Q8D.L - news) pressure, media experts said.
"Due to the newly passed law limiting foreign ownership of media organisations in Russia, Dow Jones and Pearson have entered into an agreement to divest their stakes in Vedomosti," they said in a statement.
The companies will sell their shares to the family of former journalist and media executive Damian Kudryavtsev.
The newspaper had been jointly owned by Finnish media company Sanoma (LSE: 0JLQ.L - news) , Dow Jones and Pearson, and comes out on salmon newsprint like the Pearson's flagship daily, The Financial Times.
Sanoma agreed in April (LSE: 0N69.L - news) to sell its 33.3 percent stake in Vedomosti to Kudryavtsev.
A Russian law passed last year caps foreign media ownership at 20 percent beginning in February 2016.
The Financial Times quoted a person close to the deal as calling the new Russian legislation "practically an expropriation of foreign media."
Vedomosti is a daily paper focused on business and industry news whose editorial section has become an increasingly vital platform for dissenting voices and debate on political life in Russia.
It (Other OTC: ITGL - news) often publishes reporting and analysis critical of the Kremlin.
The transaction is expected to close before the end of the year, when the new law comes into force, the companies said.
The companies did not say how much Kudryavtsev had paid for the stakes and a spokesman declined to comment.
- Editorial staff 'sorry' -
"We are very proud of the work we have done with Vedomosti and our contribution to independent press in Russia for the past 15 years," Dow Jones and Pearson said.
"The quality and integrity of the Vedomosti editorial team is outstanding and both the FT and The Wall Street Journal plan to continue licensing content to Vedomosti to provide high-quality, international news to readers in Russia."
Vedomosti editor Tatyana Lysova said that the newspaper's foreign owners would have kept their stakes were it not for the controversial law.
"All our editorial staff and me are very sorry that this proved impossible," she said in a statement posted on her Facebook (NasdaqGS: FB - news) page.
"The partnership with these great publications has been an honour for us," she said, adding that the foreign companies had chosen not to keep 10 percent each due to their corporate policies.
Kudryavtsev told AFP he did not plan any major editorial changes "for now."
In comments published by Vedomosti, he said he was happy to be part of the newspaper.
"I am sure that it will protect the interests of its readers, supplying them with important information in a quick and impartial manner," he was quoted as saying.
Lysova said the entrepreneur had offered her a seat on the board of a company that controls Vedomosti and that she agreed.
"My desire to continue working at Vedomosti will depend on how my cooperation with the new shareholder and his representatives will develop," she said.
- 'Makes pressure easier' -
Critics accuse strongman Vladimir Putin of steadily suppressing independent media and opposition parties since coming to power in 2000.
The crackdown intensified after he returned to the Kremlin for a third term in 2012 following huge protests against his rule.
Alexei Simonov, head of the Glasnost Defence Foundation, Russia's oldest media non-governmental organisation, said the fact that Vedomosti would now be fully in Russian hands did not bode well for the publication.
"I think the paper should have balance," Simonov told AFP.
"The existence of a single owner always makes pressure on a media outlet easier," he added.
Kudryavtsev bought Russia's English-language publication The Moscow Times and several other titles from Sanoma earlier this year.