Penguin-Random House merger creates publishing behemoth : Can it take on the e-biz giants?

July 1, 2013: The merger of publishing giants Penguin (part of the Pearson group) and Random House ( part of the Bertelsmann group), first announced in October 2012, has gone through. The CEO of the combined entity to be named Penguin Random House will be Random House CEO Markus Dohle. John Makinson, head of the Penguin Group worldwide since 2002, takes on the position of Chairman of Penguin Random House. Gaurav Shrinagesh till now, Managing Director of Random House India, will be CEO of the combined Penguin Random House India.

Bertelsmann owns 53% and Pearson 47% of the company that is now the world’s largest consumer publishing entity accounting for one of every four books published ( estimated). This leaves just four other big independent publishers of what was known as the Big Six: HarperCollins, Hachette, Simon & Schuster and Macmillan

Penguin Random House will combine the adult and children’s fiction and nonfiction print and digital trade book publishing businesses of Penguin and Random House in the U.S., U.K., Canada, Australia, New Zealand, and India; Penguin’s trade publishing activity in Asia and South Africa; Dorling Kindersley worldwide; and Random House’s companies in Spain, Mexico, Argentina, Uruguay, Colombia and Chile. Random House’s German-language publishing group, Verlagsgruppe Random House, is outside the venture, and remains part of Bertelsmann, continuing to report to Mr. Dohle.

Penguin Random House will employ more than 10,000 people across five continents. It will comprise nearly 250 editorially and creatively independent imprints and publishing houses that collectively publish more than 15,000 new titles annually. Its publishing lists include more than 70 Nobel Prize laureates and hundreds of the world’s most widely read authors.

The new Penguin Random House will include the self-publishing service Author Solutionsand online retailer Bookworld in Australia, both owned by Pearson. It will have to live in a new publishing world dominated by e-books – and their top players like Amazon, Apple and Google. In fact the investment bank Jeffries International is quoted as saying: “The gorilla of the book business is no publisher, it’s Amazon and it will stay that way”. “With Amazon blurring the lines between retailer and publisher, publishers, are beginning to push back by developing direct to customer sales channels to protect margin and provide alternatives to the online behemoths”, wrote Richard Bilkey in a blog at Fiction et al, back when the merger was first announced.