Publishers Penguin and Random House agree merger
Penguin and Random House announced a company merger on the 29thOctober combining publishers Pearson with the German media group Bertelsmann.
The £2.4 billion deal will see Pearson control 47%, and Bertelsmann the remaining 53%, of the new venture called Penguin Random House.
The deal will be the first of its kind among the top six major world publishers.
Known as “The Big Six”, the list includes also Hachette, HarperCollins, Macmillan and Simon & Schuster.
The announcement also brings an end to speculation that News Corporation’s Harper Collins intended to buy Penguin with a £1 billion bid.
World renowned Penguin accounts for 12% of all UK book purchases and has built its reputation on classic and educational literature. Random House is the leading English language publishing house in the UK and the US.
Despite the strength of the two companies, industry experts believe such mergers are inevitable as the rise in eBooks and the subsequent closings of high-street bookshops continue to challenge the face of publishing.
Pearson chief executive Marjorie Scardino is optimistic the merger will allow new opportunities for development and said: “Penguin is a successful, highly respected and much-loved part of Pearson. This combination with Random House will greatly enhance its fortunes and its opportunities.
“Together, the two publishers will be able to share a large part of their costs, to invest more for their author-reader constituencies and to be more adventurous in trying new models in this exciting, fast-moving world of digital books and digital readers.”
It is predicted that Penguin-Random House will dominate around a quarter of the US and UK book market, generating an annual revenue of £2.5 billion.