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DOJ approves Penguin/Random House merger

The new company would be the biggest publisher in the world

It has been a big week for big mergers. Yesterday, American Airlines and US Airways agreed to an $11 billion merger that will create the largest airline in the world.

Then, on the heels of that announcement came the news that the Department of Justice (DOJ) has approved the proposed merger of Penguin and Random House, a marriage that would create the largest book publisher in the world, controlling 25 percent of the English-language consumer book market.

The new publishing behemoth would have more power to negotiate with online book distributors like Apple, Amazon and Google, and executives hope to use the company’s size to develop new digital publishing models, the New York Times reports.

British media company Pearson owns Penguin, and German media company Bertelsmann owns Random House. Neither parent company received any conditions on the merger from the DOJ. Bertelsmann will own 53 percent of the new company.

However, the two publishers still have other regulatory hurdles to jump over, including scrutiny by the European Commission, which is known to pay special attention to mergers in the culture sector.

Even so, in a statement, Bertelsmann CEO Thomas Rabe said that “this positive first decision by one of the antitrust authorities is an important milestone on the path to uniting two of the world’s leading publishing companies into a truly global publishing group.”


Read more about the publishing industry on InsideCounsel:

DOJ and Penguin reach settlement in e-books suit

Penguin sues authors for advances on never-written books

Penguin faces age-discrimination suit

Romance novel authors sue over royalties

Apple rejects DOJ charge of e-book price collusion


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