Deal Could Merge Penguin And Random House

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LONDON (UPI) — Two companies in Europe that run brand name book publishers Penguin and Random House said they would merge their consumer publishing assets.

The companies, Bertelsmann and Pearson, would make the largest English-language consumer book publishing house in the world — Random House — even bigger, The New York Times reported Monday.

“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, Marjorie Scardino, chief executive officer of Pearson, said.

Bertelsmann CEO Thomas Rabe also said the merger of divisions would consolidate costs and help the firms compete in a publishing world dealing with new digital options.

“With this planned combination, Bertelsmann and Pearson create the best course for new growth for our world-renowned trade-book publishers, to enable them to publish even more effectively across traditional and emerging formats and distribution channels,” Rabe said.

The deal includes a new arrangement for management and sidesteps the difficulty created when Bertelsmann merged its music publishing business with Sony of Japan in a 50-50 deal that resulted in so much conflict that Bertelsmann later sold its shares.

The current deal would give Random House 53 percent of the merged company, but allow Random House CEO Markus Dohle to become the top executive of the merged company. Penguin’s chief executive, John Makinson, would become chairman.

Some literary agents have already said the deal would not be good for authors, who would see competition for their work decline. The merger could also run up against regulator opposition, given the new company would control one-quarter of the U.S. consumer book publishing business.

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