Media groups Bertelsmann and Pearson, which own Random House and Penguin, respectively, announced a merger of these two publishing giants.
Under the terms of the deal, Bertelsmann will hold 53% of the new publishing group, with Pearson holding the remaining 47%. Random House Chairman and CEO Markus Dohle has been appointed as CEO, with Pengin Chairman and CEO John Makinson appointed Chairman of the Board. Bertelsmann will appoint five representatives to the Board, and Pearson four.
“With this planned combination, Bertelsmann and Pearson create the best course for the future of our world-renowned trade-book publishers, Random House and Penguin, by enabling them to publish even more effectively across traditional and emerging formats and distribution channels," said Bertelsmann Chairman & CEO Thomas Rabe says. "It will build on our publishing tradition, offering an extraordinary diversity of publishing opportunities for authors, agents, booksellers, and readers, together with unequalled support and resources.”
“Today’s announcement is a milestone not only for Random House, but also for the entire Bertelsmann group, with its 177-year publishing history," he added. "Its significance for our business and for the cultural resonance of our book publishing operations worldwide is on a par with such momentous agreements as the takeover of Goldmann Verlag in 1977; the acquisition of a stake in Bantam Books, our first-ever U.S. investment, that same year; the purchase of Doubleday in 1986; and especially that of Random House in 1998. Each of these steps was aimed at increasing the breadth and quality of Bertelsmann’s publishing operations, as our new company will.”
Pearson CEO Marjorie Scardino said, “Penguin is a successful, highly-respected and much-loved part of Pearson. 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. 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.”
“Our new company will bring together the publishing expertise, experience, and skill sets of two of the world’s most successful, enduring trade book publishers," said Dohle. "In doing so, we will create a publishing home that gives employees, authors, agents, and booksellers access to unprecedented resources. I deeply believe that the support and services that we will be able to offer, coupled with the creative and editorial independence that we will continue to maintain, will benefit everyone in the book publishing environment, especially our passionate readers from today’s generation to the next.”
The deal is expected to close in the second half of 2013, following regulatory approval.