Penguin and Random House to Merge

On Monday, October 29, Pearson and Bertelsmann confirmed plans to merge their trade publishing groups. The new company will be called Penguin Random House and will include all the English, Spanish, and Portuguese language interests of both the Penguin Group and Random House.

Bertelsmann will own 53 percent of the new company’s shares, and Pearson will hold the remaining 47 percent. The chairman of Penguin Random House will be Penguin’s current chairman and CEO, John Makinson, and Random House CEO Markus Dohle will serve as the company’s chief executive.

In letters to their respective employees, Makinson and Dohle noted that it will take some time for the merger to take effect, and may be a year before the deal can pass regulatory hurdles.

Addressing possible concerns that the merger might reduce choice and competition, Makinson said that he and Dohle believe that the opposite will happen. “The publishing imprints of the two companies will remain as they are today, competing for the very best authors and the very best books,” he said. “But our access to investment resources will also allow Penguin Random House  to take risks with new authors,  to defend our creative and editorial independence, to publish the broadest range of books on the planet, and to do it all with the attention to quality that has always characterized both Penguin and Random House.”

In a letter to booksellers, Dohle said, “One of the key drivers of success for both companies has been our close partnerships with the bookselling community, and I am excited to think of the ways in which the new company will build on those partnerships in the future.   By bringing together the talent and resources that span both organizations, we will be able to continue to deliver amazing books, innovative sales and marketing creativity, and the best-in-class supply chain support, all of which will combine to help you to continue to connect our authors with your readers.”

It will be business as usual until the merger is approved by the government, which is not expected to happen before the second half of 2013. “We thank you for your many and ongoing contributions to Random House’s success, which has been a primary motivation behind Bertelsmann’s determination to extend and expand its commitment to trade publishing,” Dohle told booksellers. “We look forward to continuing our valued relationship with you at Random House, and post-closing together with Penguin.”