EU approves merger of Penguin, Random House
The European Commission gave the go-ahead to the merger of Penguin and Random House to create the world's No. 1 publishing house, considering that the operation will not harm competition in Europe.
Brussels: The European Commission gave the go-ahead to the merger of Penguin and Random House to create the world's No. 1 publishing house, considering that the operation will not harm competition in Europe.
The proposed transaction does "not raise competition concerns, in particular because the merged entity will continue to face several strong competitors", the executive arm of the 27-member European Union said.
The German conglomerate Bertelsmann SE, owner of Random House, will control 53 percent of the new firm, while Britain's Pearson PLC, proprietor of Penguin, will have the remaining 47 percent.
Both Penguin and Random House are among the "big six" publishers in the US, along with Hachette, HarperCollins, Macmillan and Simon & Schuster.
The merger, the biggest in the publishing sector since 2006 when Lagardere purchased Time Warner Books to create Hachette, will gather within the same company all the publishing business in English of Random House in the US, Canada, Britain, Australia, New Zealand, India and South Africa, as well as its publishing in Spanish for Spain and Latin America.
Meanwhile, Penguin brings to the new company all its business and assets, including its divisions in the US, Europe, Australia and Asia, as well as its 45 percent stake in a Portuguese-language publishing house.
Bertelsmann and Pearson say they expect the new company to generate some $4 billion in annual revenues.