Penguin, Random House merger creates world's biggest book publisher

German media conglomerate Bertelsmann and British media giant Pearson Plc yesterday completed the merger of Random House and Penguin Group, emerging as the biggest book publisher in the world.

In October last year, Penguin group, renowned publishing brand owned by media conglomerate Pearson Plc had agreed to merge its business with Random House, one of the world's largest book publishers owned by Bertelsmann, in a deal worth approximately £2.4 billion. (See: Penguin, Random House in £2.4-bn merger pact)

Under the merger, Bertelsmann will hold 53 per cent of the joint venture called Penguin Random House, while Pearson, which also owns the Financial Times, will hold the remaining 47 per cent.

Penguin Random House will comprise all the English language trade publishing divisions of Bertelsmann's Random House division in the US, Canada, the UK, Australia, New Zealand, India and South Africa; the Spanish language trade publishing divisions of Bertelsmann's Random House division in Spain and Latin America, but not Bertelsmann's German language trade publishing division Verslagsgruppe Random House.

It will also own all of Penguin's business and assets including its US, European, Australasian and Indian trade publishing divisions, its trade publishing company in China and its 45 per cent stage in a Brazilian Portuguese language publishing house.

Penguin Random House will control more than quarter of the global book business, have more than 10,000 employees, 250 independent publishing imprints and annual revenues of around $3.9 billion.

Markus Dohle, the chairman and chief executive of Random House, will now be the CEO of Penguin Random House, and John Makinson, head of the Penguin Group worldwide, will be the chairman.

''Today, Penguin and Random House officially unite to create the first truly global trade book publishing company. As separate companies, we have long performed outstandingly by every benchmark; as colleagues, we will share and apply our passion for publishing the best books with our enormous experience, creativity, and entrepreneurial drive,'' said Dohle.

Thomas Rabe, CEO of Bertelsmann, said that Penguin Random House would be able to invest ''on a much larger scale'' than the two companies had been able to do separately, while John Fallon, CEO of Pearson, said, ''This combination creates a clear world leader with a strong platform for continued creative and commercial success in a rapidly changing consumer publishing industry.''

The closing of the deal came after regulators in several countries, including the US, the EU, Canada, South Africa, China, Australia and New Zealand, approved the merger without conditions.