Pearson yesterday announced the merger of its Penguin book publisher with Bertelsmann's Random House and said it would not welcome a rival £1bn bid for the business from Rupert Murdoch.
A spokesman said: "This has been a five-month process during which we have considered several options for Penguin including an outright sale.
"The board fully understands its fiduciary duties and it came to the conclusion that today's venture was the best outcome."
Pearson also revealed that the merger will not require shareholder approval because of its size, which could make it more difficult for Mr Murdoch to take his offer direct to the company's investors rather than via the Pearson board.
The deal sees Pearson with a slightly higher share of the joint venture at 47 per cent than analysts had expected. Bertelsmann will have 53 per cent and five board members against Pearson's four.
The merger comes in the face of the growing strength of e-publishing and the dominance of book selling in fewer and fewer hands like Amazon, Apple and Google. In the joint statement, Penguin Random (as the new company will be known) said: "The combination will create a highly successful new organisation, both creatively and commercially, with the breadth and investment capacity to deliver significant benefits.
"Readers will have access to a wider and more diverse range of frontlist and backlist content in multiple print and digital formats.
"Authors will gain a greater depth and breadth of service on a global basis. And shareholders will benefit from participating in the consolidation of the consumer publishing industry without having to deploy additional capital."
The deal is unlikely to go through until the second half of next year with regulators on both sides of the Atlantic set to investigate the merger of two of the world's top four publishers. That will give Mr Murdoch time to alter his tactics.
In 2011 Random House had 16.6 per cent of the English-language book publishing market and Penguin 10.4 per cent.
Figures for this year will be skewed by the phenomenal success of Random House's 50 Shades of Grey.
Marjorie Scardino, who will step down as chief executive of Pearson at the end of this year, appears to have no intention of hoisting a white flag if Mr Murdoch launches a raid while she remains in charge.Reuse content