Bertelsmann and Pearson are to merge their books operations Random House and Penguin to create a new publishing giant and make significant economies of scale.
The new entity will be called Random House Penguin, with Bertelsmann taking boardroom control. Pearson will retain Penguin’s educational imprint.
“The core markets are USA, UK, but also the Commonwealth, we are relatively strong in Latin America and now China, India and Brazil will be added,” said Bertelsmann CEO Thomas Rabe.
The publishing industry is undergoing major transformation and consolidation faced with the challenges from the internet and e-books. Penguin may yet face a rival bid from Rupert Murdoch’s Harper Collins.