The post-merger company will have a 27% market share of the UK book publishing market, and 25% of it in the US, making it the largest publishing house in the world.
Competition authorities have approved the deal way ahead of schedule: when MT last reported on the merger, most analysts were expecting the deal to go off in the second half of this year at the earliest. But the particularly strange thing about the deal is that no money is changing hands.
What was said behind closed doors when the deal was being hatched is unknown, but the terms must have been attractive, because News Corporation’s publishing arm, HarperCollins, tried and failed to crash the deal last year with a £1bn offer for Penguin. Murdoch has obviously had to read between the lines.
In the end, it is a simple consolidation move. Bertelsmann (owner of Random House) will own 53% of the equity and Pearson (owner of Penguin) 47% in the new Penguin Random House, although we think it should have been called House of the Random Penguins.
The merger is probably a good move for the two publishers, since the rise of e-readers and digital books sales has made it increasingly difficult for traditional books to ring in the sales. And given that Penguin turned down a billion quid in favour of a ‘no cash’ agreement, it’s probably best not to judge this book by its cover.
To see MT’s previous coverage on the merger, and to discover that we have shamelessly recycled some of the excellent puns we used last time around, click here.