Pearson and Bertelsmann have completed the merger of Penguin and Random House to create Penguin Random House, with new chief executive Markus Dohle indicating that there would be a "gradual and careful integration process". The combined publishers would have recorded revenue of £2.6bn in 2012 on a pro forma basis.
John Makinson is to be chair of the new group, and has relinquished his position on the board of Penguin's former parent Pearson. Markus Dohle is to be chief executive. No announcement has yet been made on who will lead the business in the UK, but Random House UK chief executive Gail Rebuck is to sit on the board of the new group. Pearson chief exectutive John Fallon will also have a seat on that board.
Pearson and Bertelsmann said that they intended that the combined organisation's level of organic investment in authors and new product models would "exceed the total investment of Penguin and Random House as independent publishing houses".
Thomas Rabe, chairman and chief executive of Bertelsmann, said: "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. Together, we can and will invest on a much larger scale than separately in diverse content, author development and support, the publishing talent, the entire spectrum of physical and digital book acquisitions, production, marketing, and distribution, and also in fast-growing markets of the future."
Dohle said: "We are uniting two of the world's leading book publishers, with complementary skills and strengths, both with outstanding creative and commercial track records, with a passion for publishing the best books, and with two strong traditions from which the new company will develop its own culture – in the best interests of the readers, who will benefit from the quality and enormous variety of books we will publish. I welcome the Penguin Group staff as new colleagues and thank them, as well as my teams at Random House, for everything they have done on behalf of our new company and our current publishing program in the past eight months since the merger was announced. This was a compelling beginning and serves as a strong foundation for the gradual and careful integration process we are now embarking on, and for excellent future collaboration in our combined company."
Bertelsmann owns 53% of the joint venture and Pearson owns 47%. The joint venture excludes Bertelsmann's trade publishing business in Germany and Pearson retains certain exclusive rights to use the Penguin brand in education markets worldwide. In 2012, Penguin Random House had pro forma revenues of £2.6bn (€3.2bn) and operating profit of £346m (€427m). Penguin reported revenues of £1.1bn and operating profit of £98m with total assets of £1.2bn.
Penguin Random House will have operations in the US, Canada, UK, India, South Africa, Australia, New Zealand, Spain, Mexico, Argentina, Uruguay, Colombia and Chile. The new company employs more than 10,000 people and publishes more than 15,000 new titles every year across 250 imprints. It publishes many of the world's bestselling authors, including more than 70 Nobel Prize laureates.
The Penguin Random House board will comprise:
John Makinson - chairman, Penguin Random House
Markus Dohle - chief executive officer, Penguin Random House
Coram Williams - chief financial officer, Penguin Random House
John Fallon - chief executive, Pearson
Philip Hoffman EVP corporate finance & strategy, Pearson
Dr. Thomas Rabe - chairman and chief executive officer, Bertelsmann
Dr. Judith Hartmann - chief financial officer, Bertelsmann
Dr. Thomas Hesse - president corporate development and new business, Bertelsmann
Gail Rebuck - member of the Bertelsmann Group Management Committee