By Sophia Whitfield
Pearson and Bertelsmann have confirmed that Penguin and Random House have combined to form Penguin Random House. Pearson will merge its Penguin books division with Random House, owned by German company Bertelsmann.
Bertelsmann will control 53% share, while Pearson is left with 47%. Under the terms of the agreement neither party can sell shares for a three year period.
Random House has handsomely filled its coffers after the success of the Fifty Shades trilogy, while Penguin retains its link to the classics with a strong backlist including John Le Carre and Jack Kerouac.
Allen Lane famously founded Penguin in 1935 to provide high quality literature to the masses after he found himself waiting on a train station with nothing to read. Last night Penguin ended its 77 year reign as an independent.
Rupert Murdoch had an interest in purchasing Penguin which would have asserted his domination of publishing, News Corp currently owns HarperCollins, however it would seem he has been pipped at the post.
In a statement, the publishers said: "The combination brings together two of the world's leading English language publishers, with highly complementary skills and strengths. Random House is the leading English language publisher in the US and the UK, while Penguin is the world's most famous publishing brand and has a strong presence in fast-growing developing markets ...”
"In reviewing the long-term trends and considerable change affecting the consumer publishing industry, Pearson and Bertelsmann both concluded that the publishing and commercial success of Penguin and Random House can best be sustained and enhanced through a partnership with another major international publishing house."
The combined company, Penguin Random House, will control 26% of the global market. The deal will be consolidated in the second half of 2013.
As with all mergers staff at both Penguin and Random House must be in a state of flux. Let’s hope this combined company does not mean the loss of valuable jobs in the publishing industry.
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