Book Publishers Random House and Penguin To Merge

European companies Bertelsmann and Pearson are merging their book publishing divisions Random House and Penguin together.  The two combined companies will enable the two companies to be able to better deal and scale in the e-book market.  The combined publishers would have a global market share of over 25%.

Random House recently published the popular book series “Fifty Shades of Grey.” and Penguin publishes classics from authors like George Orwell.

Bertelsmann (Random House’s parent company) would own 53% of the combined company, which will be called Penguin Random House.  Pearson will own 47%.  Random House’s Markus Dohle will be the CEO and Penguin’s John Makinson will be chairman of the combined company.  The combined company will be based in New York and will have an annual revenue of roughly $3.8 billion.

Bertelsmann CEO Thomas Rabe said that the merger will allow the company to invest in digital operations and emerging markets.  The publisher will let publishers cut costs in their back offices too.

“The intention is to continue to invest in the creative potential of the businesses,” stated Mr. Rabe.  “While we will be combining the strengths of both companies, we will be maintaining the distinctive identities of all our imprints.”

[NY Times]

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at
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