Following up on last week’s acknowledgement by Pearson that the company is in talks with Bertelsmann to merge their two consumer book publishing divisions, Penguin and Random House, the companies issued a statement today that the deal is ”expected to complete in the second half of 2013,” assuming it clears regulatory approvals.
Random House will own a controlling 53% share of the company that will be known as Penguin Random House. The CEO of the new group will be Markus Dohle, currently CEO of Random House. John Makinson, Chairman and CEO of the Penguin Group will be the chairman of Penguin Random House. The new venture is expected to be based in New York, where Dohle now resides and Makinson is expected to spend more time.
This makes for a very nervous time for the staffs of both companies as they worry about which jobs will become redundant. Makinson told The Guardian that “the strategy behind the deal was not to take an axe to the editorial side of the business, but that there could be savings to be had in the back office.”
Over the weekend, news broke that NewsCorp, owner of HarperCollins, had made a counterbid for Penguin. Some reports indicated that this could undermine the proposed merger. Responding in The Guardian, Mackinson dismissed that idea, saying, “There isn’t any sort of break clause [with Bertelsmann]. It is a signed transaction.”