updated 11:01 am EDT, Mon October 29, 2012
Deal will result in largest book publisher, to be complete by latter half of 2013
Penguin and Random House have announced they will merge to become the world's biggest English-language book publisher. This is likely a result of the ever-growing and competing e-book market, though neither admits it. Under the terms, Random House will own 53 percent of Penguin Random House, while Penguin will take the rest.
The deal is expected to close in the latter half of 2013, and requires approval from competition commissions. What's not included in the deal is Bertelsmann's (Random House owner) trade publishing business in Germany, while Pearson will continue using the Penguin brand in global education markets.
The two will streamline the operation to cut costs, which likely means job cuts in the future. The Board of Penguin Random House will get five directors from Bartelsmann and four from Pearson. The chairman will be John Makinson, who is the current chairman and chief executive of Penguin, while Random House chief executive Markus Dohle will become the new joint venture's chief executive.
Penguin Random House will also explore digital publishing models and high-growth emerging markets. The new companies will also invest more into authors and new product models than the two would otherwise, as their own entities, they said in a statement.
Once the deal is done, neither parent company can sell any part of their shares in Penguin Random House for three years.