Pomona College considers acquiring Claremont Graduate University

Dive Brief:

Pomona College is considering acquiring Claremont Graduate University after initiating confidential talks in late spring and entering exclusive talks in December. 
The private nonprofit institutions, in California, announced their discussions last week and invited their communities to weigh in. They expect to negotiate a definitive agreement over the next six months. 
CGU has been exploring teaming up with another institution for over a year. On an FAQ page, the university says it is seeking “a mission-aligned partner that values graduate education and can support CGU’s transformation in response to financial, demographic, and technological change.”

Dive Insight:

Pomona and CGU’s agreement to exclusively discuss a transaction is nonbinding, meaning either can walk away from the talks at any point. For its part, CGU said that if it determines that “a partnership is not in its best interest or cannot be structured appropriately, the partnership will not proceed.”

Although they are still negotiating a detailed agreement, CGU wants a deal that would preserve its “name, mission, graduate identity, and academic autonomy.” The university also said that a transaction would neither result in a single institution nor would its students receive degrees from Pomona. 

Pomona is an undergraduate liberal arts college offering just under 50 bachelor’s programs in the arts, humanities, natural sciences and social sciences, while CGU offers master’s, doctoral and certificate programs in a wide range of liberal arts and professional areas. 

On the table is a deal that would turn CGU into a legal subsidiary of Pomona. This would not mean, according to CGU, that Pomona would subsidize its operations. Rather, Pomona would provide strategic guidance while helping it explore options for new financial models, investment management and additional revenue. 

“CGU and Pomona would remain distinct institutions with separate admissions, academic programs, faculty, and degrees,” CGU said on its FAQ page. “Each school would continue to serve its own students and maintain its own educational mission.”

Likewise, Pomona President Gabrielle Starr said in a statement Thursday that “Pomona’s liberal arts undergraduate mission must and will not be turned aside by any agreement with CGU.”

Both institutions are part of the Claremont Colleges consortium, a century-old collaboration among seven independent institutions with adjoining campuses in southern California. It aims to provide “university-scale services and facilities” while individual institutions maintain the small liberal arts college experience, according to its website. 

In entering talks with CGU, Pomona’s board considered “whether this partnership may, in fact, be essential to protecting and preserving the Consortium,” Starr said. Specifically, the college said in an FAQ that having a role in shaping CGU’s future could ensure the stability of the consortium, whereas an outsider partnering with CGU might not have the same interests in the coalition. 

A partnership could also create new graduate pathways for Pomona’s students, the college said in the FAQ. 

The two institutions have similarly sized student bodies, though they’re on different trajectories. Pomona’s fall headcount in 2023 stood at 1,664, up 5.8% from five years prior. CGU had 1,763 students in fall 2023, a decline of 6.3% from 2018. 

Pomona also has more financial resources, with $3.9 billion in total assets and $424.6 million in liabilities in fiscal 2024 compared to CGU’s $347.4 million in assets and $57.2 million in liabilities. 

Just under two years ago, CGU, facing an operating deficit, formed a committee to look at new institutional models to ensure its sustainability. Last July, it hired a consultancy, Tyton Partners, which specializes in transactions and partnerships in the education sector. In the early months of this year, the institution reached out to over 100 possible partners and invited them to provide written interest. 

CGU narrowed the list of prospects down to about a dozen and sought formal indications of interest. It eventually landed on Pomona to hold exclusive talks about a transaction. 

“This would not be a bailout or merger,” CGU Interim President Michelle Bligh said in a public message Thursday, describing instead a “true alliance” and “opportunity to co-create a new model of graduate education for the 21st century.”