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| Version 2 | Version 3 |
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| Penguin and Random House owners agree joint venture | Penguin and Random House owners agree joint venture |
| (35 minutes later) | |
| Publisher Pearson says it has agreed a deal with German media group Bertelsmann to combine their Penguin and Random House businesses. | Publisher Pearson says it has agreed a deal with German media group Bertelsmann to combine their Penguin and Random House businesses. |
| Under the terms of the deal, the two businesses will be run in a joint venture called Penguin Random House. | |
| Bertelsmann will own 53% of the joint venture, while Pearson will own 47%. | |
| The two firms said last week that they were discussing a deal. A report at the weekend also said News Corporation was planning a bid for Penguin. | The two firms said last week that they were discussing a deal. A report at the weekend also said News Corporation was planning a bid for Penguin. |
| The Sunday Times reported that News Corp - which owns publisher HarperCollins - was prepared to make a "substantial cash offer" for Penguin, expected to be about £1bn. | The Sunday Times reported that News Corp - which owns publisher HarperCollins - was prepared to make a "substantial cash offer" for Penguin, expected to be about £1bn. |
| 'Enhanced opportunities' | 'Enhanced opportunities' |
| The tie-up between Penguin and Random House marks the first deal between the world's big six publishers. | The tie-up between Penguin and Random House marks the first deal between the world's big six publishers. |
| When news of the talks emerged last week, industry observers said that such deals were inevitable as firms sought to adapt to the changing publishing landscape. | When news of the talks emerged last week, industry observers said that such deals were inevitable as firms sought to adapt to the changing publishing landscape. |
| The rapid take-up of ebooks means publishers are now attempting to bolster their negotiating strength, most notably with Amazon. | |
| Pearson chief executive Marjorie Scardino, who is leaving the firm at the end of the year, said: "Penguin is a successful, highly-respected and much-loved part of Pearson. This combination with Random House... will greatly enhance its fortunes and its opportunities. | Pearson chief executive Marjorie Scardino, who is leaving the firm at the end of the year, said: "Penguin is a successful, highly-respected and much-loved part of Pearson. This combination with Random House... will greatly enhance its fortunes and its opportunities. |
| "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." | "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." |
| Based on recent results, combining the two firms will create a business with annual revenues of about £2.5bn. | Based on recent results, combining the two firms will create a business with annual revenues of about £2.5bn. |
| In 2011, Random House's revenues were 1.7bn euros (£1.5bn) with an operating profit of 185m euros. Meanwhile, Penguin recorded revenues of £1bn and a £111m operating profit. | In 2011, Random House's revenues were 1.7bn euros (£1.5bn) with an operating profit of 185m euros. Meanwhile, Penguin recorded revenues of £1bn and a £111m operating profit. |
| The joint venture is subject to regulatory approval, but the two firms hope the deal will be completed in the second half of 2013. | The joint venture is subject to regulatory approval, but the two firms hope the deal will be completed in the second half of 2013. |