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Publish Date : 03-Jul-2013

Bertelsmann and Pearson today signed the final contracts combining the worldwide activities of Random House and Penguin Group, their respective trade book publishing companies. The transaction completes the formation of Penguin Random House, announced October 29, 2012, in which Bertelsmann will own 53 percent and Pearson 47 percent. Penguin Random House will be comprised of all of Random House and Penguin Group's publishing divisions and imprints in the U.S., Canada, U.K., Australia, New Zealand, and India, as well as Random House's publishers in Spain and Latin America, and Penguin's trade publishing activity in Asia and South Africa.

Markus Dohle, previously Chairman and Chief Executive Officer of Random House since June 2008, will serve as CEO of Penguin Random House. John Makinson, who headed the Penguin Group from 2002, is the company's Chairman of the Board of Directors.

Bertelsmann has appointed five representatives to the Penguin Random House Board of Directors and Pearson four. Bertelsmann's appointments are Thomas Rabe (Chairman and Chief Executive Officer of Bertelsmann); Markus Dohle (Chief Executive Officer, Penguin Random House and member of Bertelsmann's Executive Board); Judith Hartmann (Chief Financial Officer of Bertelsmann); Thomas Hesse (President, Corporate Development and New Businesses of Bertelsmann) and Gail Rebuck (Member of the Bertelsmann Group Management Committee). The Penguin appointees are John Makinson (Chairman, Penguin Random House), John Fallon (Chief Executive Officer, Pearson), Coram Williams (Chief Financial Officer, Penguin Random House) and Philip Hoffman (SVP, Corporate Finance & Strategy, Pearson).

The world headquarters of the privately held company will be in New York City. Penguin Random House will employ more than 10,000 people worldwide across almost 250 imprints, and will generate annual revenues of approximately €3 billion (Ł2.5 billion, $3.9 billion). Munich-based Verlagsgruppe Random House, the German-language publishing group, will remain at Bertelsmann, outside the new company, continuing to report to Markus Dohle.

Today's closing was preceded during the past several months by governmental merger control approval of the proposed combination in the respective countries where it was required: the U.S. Department of Justice in February; Australia and New Zealand in March; the EU Commission and Canada in April; and South Africa and China in May. All these approvals were granted without conditions. Bertelsmann Chairman and CEO Thomas Rabe says, "With today's launch of Penguin Random House, Bertelsmann and Pearson have set a great course for the future of the book, and book publishing – and new growth for Bertelsmann."

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