Tue, 30 Oct 2012 | MERGER
The publishing world witnessed quite a shake-up this week when Penguin and Random House, two of the largest publishers, confirmed their merger plans.
Marjorie Scardino, chief executive of Penguin's parent group Pearson, explained that the deal would allow the resulting merged company to invest greater resources in digital publishing, including the potential development of a web platform selling books direct to consumers along the lines of Amazon.
Meanwhile, Thomas Rabe, chief executive of Random House owner Bertelsmann, confirmed that the two businesses have signed “binding contracts”.
Rupert Murdoch's News Corp had also been considering pitching in on the deal. Reports in the Financial Times confirmed that News Corp, which owns HarperCollins publishing group, approached Pearson last week in an informal context “at the highest level” about a cash counterbid.
But even the weight of Murdoch's media empire is now unlikely to be able to overturn the deal following the signing.
Under the terms of the contract, 53 per cent of the firm will be held by Bertelsmann and 47 per cent will be owned by Pearson. Penguin's current chairman and chief executive John Makinson will become full-time chairman of the merged company, while Markus Dohle, head of Random House, will take up the position of chief executive.
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