A deal sealed over a weekend – Pearson and Bertelsmann are combining their consumer book publishers Penguin and Random House in a joint venture to save money that can be invested in the future of digital content.
“Penguin Random House” will be held 47 percent by Pearson and 53 percent by the German media conglomerate Bertelsmann but does not include Bertelsmann’s business books. So why are the companies merging? An announcement says:
Pearson CEO Marjorie Scardino:
Penguin CEO John Makinson:
In a letter to staff, Random House CEO Markus Dohle, who will occupy that role in the JV whilst Makinson becomes chair, claimed:
Key facts: The players
Random House: world’s largest book publisher, arond 10,000 books a year.
Random House 2011 revenues (PDF) were €1.75 billion (USD $2.27 billion).
Penguin publishes over 4,000 books a year. 2011 revenues (PDF) were £1.05 billion (USD $1.7 billion).
Thanks to planned cost savings from back-office combination, the JV’s “organic investment in authors and new product models will exceed the total” they are currently making independently, the companies say.
The merger will create a global book publishing powerhouse with a presence in the fast-developing digital markets China, India and Brazil.
It will likely also give the two publishers greater clout when negotiating with digital distributors like Apple, Amazon and Google.