When Pearson and German media group, Bertelsmann, merged Penguin Books and Random House in a £2.4bn deal in July 2013, they created the world’s biggest book publisher by revenues, accounting for one in every four books sold globally. Now, just three-and-a-half years later, Pearson has almost decided to offload its 47 per cent stake in the joint venture – a move that will in all probability increase Bertelsmann’s stakes in the company from 53 percent to between 70 and 75 percent, if Pearson exercised its option to sell.
Presenting Bertelsmann’s rationale behind the move, their Chief Executive, Thomas Rabe said, “The publishing industry is and will remain one of our strategic core businesses, and will further strengthen our presence in the US, which is our second largest market.”
The German company bids on the strength of printed print publications in international markets, especially in the US and India. Their publishing section profits in 2015 clocked at €557 million – a 50 percent increase compared to 2014. They predict the market will remain strong in the coming months.
The company was founded in 1835, and employs 117,000 in television, magazine, education, publishing and other sectors in 63 countries around the world today. Random House was set up in the US in 1925, and acquired by Bertelsmann in 1998.