Penguin-Random House Merger Completed by Parent Companies Bertelsmann and Pearson

12:10 AM PST 07/01/2013 by Scott Roxborough
The newly merged publishing giant will control around a third of trade book sales.

The new books giant will combine such best-sellers as “Fifty Shades of Grey” with Tom Clancy titles and "The Hardy Boys" franchise.

COLOGNE, Germany – German media group Bertelsmann and U.K.-baed Pearson have completed the merger of their American trade book-based publication arms, Random House and Penguin, to create a new publishing giant, Penguin Random House.

The deal, first announced last October, will see Bertelsmann hold 53 percent of the newly merged company, with Pearson controlling 47 percent. 

The new company is now operating at the penguinrandomhouse.com. The company is using a logo that essentially pairs the two old logos side-by-side (shades of the problems Mad Men's Sterling Cooper & Partners had coming up with a post-merger name and logo).

Penguin Random House will combine all of Random House and Penguin Group’s publishing divisions and imprints in the U.S., Canada, U.K., Australia, New Zealand, and India, as well as Random House’s publishers in Spain and Latin America, and Penguin’s trade publishing activity in Asia and South Africa.

The new group will control around 30 percent of trade book sales with a stable of titles that runs from Fifty Shades of Grey to The Hardy Boys.

PHOTOS: 11 Biggest Book-to-Big Screen Adaptations of the Last 25 Years

Random House CEO Markus Dohle will take over as head of the new company, with Penguin Group's John Makinson as Chairman of the Board of Directors.

Bertelsmann will have five representatives on the company's board of directors to Pearson's four. Bertelsmann’s include: Dohle; Bertelsmann Chairman and CEO Thomas Rabe; CFO Judith Hartmann; Thomas Hesse, President, Corporate Development and New Businesses of Bertelsmann and Gail Rebuck, a member of the Bertelsmann Group management committee. In addition to Makinson, Penguin's appointees will be Pearson CEO John Fallon, CFO Coram Williams and Philip Hoffman, SVP, Corporate Finance & Strategy.

Penguin Random House will be headquartered in New York and employ more than 10,000 people worldwide across nearly 250 imprints.  

Annual revenues for the merged company will be around $3.9 billion (€3 billion/£2.5 billion).

ANALYSIS: What the Random House-Penguin Merger Means for Authors

Random House German-language imprint Verlagsgruppe Random House, based in Munich, will not be part of the merger and will remain a full subsidiary of Bertelsmann.

The mega-merger has received approval from the U.S. Department of Justice, the European Commission as well as anti-trust bodies in Canada, Australia, New Zealand, China and South Africa, with no conditions imposed.

Bertelsmann head Thomas Rabe said the merger would “set a great course for the future of the book, and book publishing – and new growth for Bertelsmann. Together, we can and will invest on a much larger scale than separately in diverse content, author development and support, the publishing talent, the entire spectrum of physical and digital book acquisitions, production, marketing, and distribution, and also in fast-growing markets of the future.”

The Random House-Penguin merger is part of a broader strategy spearheaded by Rabe at Bertelsmann that aims to make the German media giant more global and more digitally savvy. 

“This combination creates a clear world leader with a strong platform for continued creative and commercial success in a rapidly-changing consumer publishing industry,” said Pearson CEO John Fallon. “This will be an excellent business and we will be active long-term partners in it.”

Markus Dohle said it was a “great privilege” to head up what he termed “this historic union of Random House and Penguin...We are uniting two of the world's leading book publishers, with complementary skills and strengths, both with outstanding creative and commercial track records, with a passion for publishing the best books, and with two strong traditions from which the new company will develop its own culture – in the best interests of the readers, who will benefit from the quality and enormous variety of books we will publish."

comments powered by Disqus