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The Penguin Random House merger is likely to be investigated "carefully" by the European Commission, according to a legal specialist. Bertelsmann is also notifying other regulatory boards around the world of the move.
Barrister Alison Berridge, a competition law specialist at Monckton Chambers, said: "Given the size of the parties and the nature of their businesses, I would expect the European Commission to look at this transaction carefully."
A potential merger involving companies of this size must always be reported to and cleared by the necessary international regulatory boards. Markus Harbaum, spokesman for Bertelsmann, said the EC and US regulatory boards had already been informed of the planned move, with all papers going to them at the beginning of next week. "We will also be contacting other authorities in places such as South Africa, Australia and New Zealand because Penguin is everywhere, there will be others to inform. The bodies have to be notified and they decide whether they have to investigate it, and we think it is likely that they will, but our lawyers have looked into it all and we are quite optimistic that the whole transaction will be approved as we have organised it," he said.
Pearson spokesman Charles Goldsmith said: "Pearson plans to work closely with any and all regulatory authorities to make sure that they have all the information necessary to complete the deal." It is understood the EC competition process can take up to nine months.
Berridge drew comparisons to the EMI and Universal merger earlier this year in the music business which resulted in "an extended review in Brussels". She noted that Universal and EMI had not had an "easy ride", despite the pressures represented by the move to digital formats and the rise of piracy, and suggested this may be a precedent for the way the EC would approach mergers in creative industries.
Berridge noted that Universal and EMI had to sell off some assets in order for the deal to be approved, and added: "It can end up being quite interesting, because then elements get moved around the industry so it's like a shuffling of cards."