Pearson eyes Penguin, Random House merger

Company in talks with Bertelsmann over possible agreement

Pearson is in talks to merge its Penguin consumer publishing subsidiary with rival Random House, owned by Bertelsmann, in what could be one of the biggest book deals in years.

“Pearson confirms that it is discussing with Bertelsmann a possible combination of Penguin and Random House. 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,” Pearson said in a statement.

Deals in the publishing space are increasingly likely as e-books grow and publishers seek leverage with giants like Amazon, Apple and Google.

Pearson has said it plans to focus on its education division. CEO Marjorie Scardino is stepping down at year-end and John Fallon, head of the International Education business, will succeed her.

A Penguin-Random House combo would control about 25% of the U.S. book market with authors like Dan Brown, John Grisham, Tom Clancy and Patricia Cornwell.

In 2006, France’s Lagadere acquired Time Warner Books for $540 million.

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