The proposed merger between Bertelsmann and Pearson’s publishing divisions have just received approval by the US Department of Justice. This is a very important milestone for the join venture to be finalized by the 2nd half of 2013.
When Pengion and Random House end up joining forces, under one roof, it will account for 1/4 of all book releases in the Western World. Thomas Rabe, chief executive of Bertelsmann, told the media today that the merger will “enable investments worldwide in new digital publishing models, in new distribution paths, products and services and in the major growth markets”.
Under terms of the proposed deal Bertelsmann would own 53% and Pearson 47% of the new company, to be called Penguin Random House. So what have both of these companies published in the last few years? Try E.L. James, John Grisham, Patricia Cornwell and Elizabeth Gilbert.
The US Justice Department was the first major step for this approval process to be finalized. There are still many other countries that have to sign off on the process, but most will look at the US decision to formulate their own. Canada, UK, Australia, New Zealand, India and South Africa are the main ones that have to sign off. China, Latin America and Spain are considered locks, because the countries aren’t the sticklers for regulation.
Once this deal goes through, it will be very interesting to see if other publishing mergers will occur or if will will see an influx of new content distribution channels to peddle eBooks.