Pearson and Bertelsmann announced an agreement to merge their Penguin and Random House publishing houses yesterday, in a move that will create the world’s largest book publisher.
Penguin and Random House will combine their businesses in a newly created joint venture named Penguin Random House, with Bertelsmann owning 53 percent of the new company and Pearson owning 47 percent. The joint venture will exclude Bertelsmann’s trade publishing business in Germany, and Pearson will retain rights to use the Penguin brand in education markets worldwide. The merger is set to finalize in the second half of 2013.
Pearson and Bertelsmann believe that the new, combined organization will give the publishers a stronger platform and greater resources to invest in content, new digital publishing models and high-growth emerging markets.
“This combination with Random House, a company with an almost perfect match of Penguin’s culture, standards and commitment to publishing excellence, will greatly enhance its fortunes and its opportunities,” says Marjorie Scardino, chief executive, Pearson. “Together, the two publishers will be able to share a large part of their costs, to invest more for their author and reader constituencies and to be more adventurous in trying new models in this exciting, fast-moving world of digital books and digital readers.”
Bertelsmann will nominate five directors to the board of Penguin Random House and Pearson will nominate four. John Makinson, currently chairman and chief executive of Penguin, will be chairman of Penguin Random House and Markus Dohle, currently chief executive of Random House, will be its chief executive.