With News Corp.'s late bid to absorb Penguin into HarperCollins thwarted, Penguin Random House is now a done deal. Pearson and Bertelsmann have confirmed previously announced plans to merge the two major publishers. Random House's German overlords Bertlesmann will have a 53 percent stake in the new company, with Pearson retaining 47 percent ownership.
Speculation about this announcement has been going on for some time, with a change in Pearson's leadership earlier this month widely taken as a sign that the corporation would restructure its holdings. Pearson's educational texts have been much more profitable for the company, and market analysts singled out Penguin as the property Pearson would be most likely to sell. Before Pearson-owned newspaper the Financial Times announced discussions with Bertelsmann, many saw Rupert Murdoch's News Corp. as a likely buyer. But it looks like Murdoch was late to the punch, and Penguin's leadership have rejected his cash offer for Penguin. Penguin's former CEO and soon-to-be chairman John Makinson told The Guardian's Mark Sweney, "There isn't any sort of break clause [with Bertelsmann]. It is a signed transaction." Current Random House chief executive Markus Dohle will become the new company's CEO.
So far the news has incited a mixture of anxiety and laughter. First, industry professionals were frightened by news of further consolidation and all the lay-offs that may entail, then they giggled over memes about what absurd names to call the new publisher. I'm sad to say that neither Random Penguin nor Penguin House panned out. The powers that be apparently have no sense of humor, and have saddled the new company with the impressively unimaginative title Penguin Random House.
The finalization makes the publishing industry sandbox considerably smaller, bringing the Big Six down to a Big Five, with Penguin Random House estimated to control a quarter or more of all book sales. It remains to be seen how a publisher with as much market share as Penguin Random House will pass antitrust approval, and how it would affect the remaining major players Simon & Schuster, HarperCollins, Macmillan, and Hachette.
This article is from the archive of our partner The Wire.