It’s official: Penguin and Random House are betrothed, their parent companies Pearson and Bertelsmann announced today.
As is often the case with arranged marriages, it is hoped that this union will allow the two houses to consolidate their power: together, the book publishers are expected to control over one quarter of the U.S. and British markets, and to generate approximately £2.5 billion (or $4 billion) in annual revenue.
And as with so many weddings these days, theirs is “subject to regulatory approval;” if all goes well, they will likely tie the knot in the latter half of 2013.
The idea of huddling together was no doubt influenced by the increasing need for publishers to puff out their chests against retailing giant Amazon, which has cornered 90 percent of the UK ebook market, and nearly 40 percent of the market for all books, according to Quartz.
Analysts are saying that this could be the first of many marriages among big publishers. "We have already seen a bit of consolidation, for example [French group] Lagardère buying [UK publishers] Orion and Octopus, but it is likely to accelerate as publishers need all the buying power they can get," said media analyst Theresa Wise, according to the BBC. "Amazon is so big that [at the moment] they don't have much power."
“Together, the two publishers will be able to share a large part of their costs, to invest more for their author and reader constituencies and to be more adventurous in trying new models in this exciting, fast-moving world of digital books and digital readers," said Marjorie Scardino, the outgoing CEO of Penguin parent Pearson, which also owns the Financial Times.
The deal will give Pearson, a British company, a 47 percent stake in the new entity; German company Bertelsmann will take 53 percent. The new group’s Chairman will be John Makinson of Penguin, with Markus Dohle of Random House assuming the role of CEO.
This deal represents the first time that two of the book publishing world’s “big six” have shared ink, although a third may still try to speak now rather than forever hold its peace: Rupert Murdoch’s News Corp, owner of big sixite HarperCollins, apparently was eying Penguin to the tune of £1 billion over the weekend, according to The Sunday Times.
While the title of the new joint venture – Penguin Random House – is less original than some Twitter users had hoped, we know better than to judge a book by its cover.