EU Gives Green Light to Penguin, Random House Merger

BRUSSELS--European Union regulators have given the unconditional green light to the proposed merger between Bertelsmann SE & Co.'s Random House and Pearson PLC'S (PSON.LN) Penguin Group, another step on the way to create the world's biggest publishing house.

The two companies in October said they intended to merge later this year into Penguin Random House, with Bertelsmann owning a 53% stake and Pearson owning 47%. The merger is expected to close in the latter part of this year, pending regulatory approvals elsewhere.

The European Commission, which acts as the European Union's anti-trust watchdog, said Friday the deal posed no threat as the merged company would continue to face strong competition.

"Penguin Random House will continue to face competition from several large and numerous small- and medium-sized publishers," it said in a statement. "As regards the sale of English language books, the merged entity will furthermore face a concentrated retail base, such as supermarkets for print books and large online retailers for e-books, like Amazon."

Random House is the largest book publisher in the U.S. and the U.K., and Penguin is second-largest player in the US and third in the U.K.

The EU's regulatory approval comes nearly two months after the U.S. Justice Department gave its backing without restrictions. Canada and China are among the countries still reviewing the deal.

Industry experts say Penguin Random House could represent around one quarter of global English-language consumer book sales.

Penguin Random House will include all of the English-language trade publishing divisions of Bertelsmann's Random House division in the U.S., Canada, the U.K., Australia, New Zealand, India and South Africa, as well as the Spanish language trade-publishing divisions of Bertelsmann's Random House division in Spain and Latin America.

Write to Vanessa Mock at [e-mail]

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