Publishers Random House and Penguin in merger talks

 

Two of the world's largest book publishers are in talks to create a new market leader designed to wrestle back leadership of the industry from the technology interlopers Apple and Amazon.

Random House and Penguin, which is owned by the Financial Times (FT) publisher Pearson, are weighing up a merger in response to the rise in popularity of ebooks.

A deal would combine the companies who are respectively behind Nigella Lawson's latest Italian cooking adventure and Pippa Middleton's party-planning guide.

German-owned Random House has also experienced huge success this year with the Fifty Shades of Grey trilogy, which has shifted 30 million copies at the last count.

A tie-up is expected to leave the privately held media group Bertelsmann with a majority share in the new venture, which would control a quarter of the market in Britain and America and dominate the best-seller lists.

It also raises questions over the future direction of Pearson, whose long-serving boss, Dame Marjorie Scardino, steps down at the end of the year. She remoulded the business into an education giant, but stood firm behind the FT, leaving analysts to speculate the newspaper would be sold, not Penguin, when John Fallon succeeds her.

However, a deal would be scrutinised by competition authorities. In Britain, Random House is the second-largest book publisher, followed by Penguin. The market leader is French-owned Hachette. Fourth comes Rupert Murdoch's HarperCollins, which is due to be spun off from News Corporation together with the mogul's newspaper assets.

"Pearson confirms that it is discussing with Bertelsmann a possible combination of Penguin and Random House," a company statement said. "The two companies have not reached agreement and there is no certainty that the discussions will lead to a transaction. A further announcement will be made if and when appropriate."

Digital advances are redrawing the media world. Universal Music recently won approval to swallow up EMI, home of Katy Perry and Coldplay, although it will be forced to make disposals.

The publishing industry has followed music from the high street into cyberspace. Apple and several leading publishers were sued by the US Department of Justice this year for alleged collusion. Most parties agreed to settle.

Bertelsmann has grown practised at splicing its assets together with others. It put its record label, BMG, into a joint venture with Sony. After selling out completely, it set up another music venture with private-equity group KKR.

It has also dealt with Pearson before. The pair amalgamated their TV businesses to create what is now RTL, Bertelsmann's biggest division.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before