Talks between publishers’ owners Pearson and Bertelsmann may conclude quickly, say insiders, as Pearson shares rise 0.7%
Talks over a merger of book publishers Penguin and Random House could be concluded within a fortnight, insiders have indicated.
Penguin owner Pearson and Bertelsmann, the German parent company of the US publisher Random House confirmed the talks on Thursday. Shares in Pearson, also owner of the Financial Times, were up 0.7% as investors appeared to welcome the potential deal.
The negotiations are further evidence that the books industry is under enormous pressure with the rapid growth of ebooks showing customers less willing to spend money on print.
A merger would bring together two of the world’s “big six” publishers to create a new powerhouse that would publish 25% of all books sold in the UK. The combined company’s authors would include TV chef Jamie Oliver, Fifty Shades of Grey author EL James as well as Charlotte Link, John Grisham and diver Tom Daley. Between March and June this year James’s erotic trilogy sold more than 30m copies worldwide – evenly split between print and digital – which helped Random House to a record pre-tax profit in the first half of the year. Revenues rose 20% to €947m (£760m), up from €787m in the first half of 2011, with operating profit rising by 64% to €113m.
The merger discussions come weeks after Pearson’s chief executive, Dame Marjorie Scardino, announced her intention to stand down after 15 years at the helm. Her exit sparked speculation that the FT could be sold – she had vowed that would only happen “over my dead body”.
In Germany Bertelsmann is majority owner of the magazine publisher Gruner + Jahr, which includes the Financial Times Deutschland in its list. There has been speculation over the future of the German version of the paper, which recently shrank its print version.
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