U.S. Department of Justice makes way for Penguin-Random House merger |
Written by Christine D. Johnson | |
Tuesday, 05 March 2013 08:39 AM America/New_York | |
Full approval of the deal will make the new company ‘a truly global publishing group' The U.S. Department of Justice (DOJ) has approved the proposed merger of Penguin and Random House “without conditions,” according to a DOJ statement issued to their respective parent companies, Pearson and Bertelsmann. “We are very pleased that the U.S. Department of Justice has concluded its review and made a determination to clear the planned combination of Random House and Penguin without any conditions,” said Thomas Rabe, chairman and CEO of Bertelsmann. “This positive first decision by one of the antitrust authorities is an important milestone on the path to uniting two of the world’s leading publishing companies into a truly global publishing group.” Last October, Pearson and Bertelsmann announced their plan to unite the two houses. Joining Penguin and Random House was thought to help the merged company gain more traction in the digital book market. “It will enable investments worldwide in new digital publishing models, in new distribution paths, products and services and in the major growth markets,” Rabe said. The DOJ decision comes at a much faster pace than did its approval of HarperCollins Publishers’ acquisition of Thomas Nelson, which took approximately nine months. Under terms of the new deal, Bertelsmann would own 53% and Pearson 47% of the new Penguin Random House company. After the merger is completed, the company will control more than 30% of all trade book publishing. The WaterBrook Multnomah Publishing Group is part of Random House. Penguin Random House will encompass all of Random House and Penguin Group’s publishing units in the U.S., Canada, the U.K., Australia, New Zealand, India and South Africa, as well as Penguin’s operations in China and Random House’s publishers in Spain and Latin America. The German publishing group, Munich-based Verlagsgruppe Random House, will not be part of the group, but will remain with Bertelsmann. Chief executive officer of the joint venture will be Markus Dohle, now CEO of Random House, and John Makinson, Penguin CEO, will become chairman. Surpassing HarperCollins Publishers and Hachette Book Group in size, the newly formed company will control 25% of the book publishing industry, Rabe said. The U.S. was the first country to approved the proposed merger, which is still under review by the European Commission, the Canadian Competition Bureau and other antitrust authorities around the world. Pearson and Bertelsmann expect the transaction to close in the second half of 2013. |