Penguin Random House would potentially have the market power to negotiate better deals for itself.
FORBES: Five Thoughts on a Penguin-Random House Merger: Rapid Reaction
Bertelsmann will nominate five directors to the Board of Penguin Random House and Pearson will nominate four.
ENGADGET: Penguin and Random House merge, promise a brave new e-book future
In addition, from five years after completion, either partner may require an IPO of Penguin Random House.
ENGADGET: Penguin and Random House merge, promise a brave new e-book future
This size and reach would give Penguin Random House advantages in recruiting, expanding internationally, making digital investments and in negotiating with partners.
FORBES: Five Thoughts on a Penguin-Random House Merger: Rapid Reaction
That is because later this year, their respective publishing companies are expected to merge into a new company called Penguin Random House.
Under the terms of the agreement, Penguin and Random House will combine their businesses in a newly-created joint venture named Penguin Random House.
ENGADGET: Penguin and Random House merge, promise a brave new e-book future
Under the terms of the agreement, neither Pearson nor Bertelsmann may sell any part of their shareholding in Penguin Random House for three years.
ENGADGET: Penguin and Random House merge, promise a brave new e-book future
Penguin Random House will dominate the best-seller list when the merger between the two large publishers closes in the second half of 2013.
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The new company will be called Penguin Random House.
FORBES: Five Thoughts on a Penguin-Random House Merger: Rapid Reaction
John Makinson, currently chairman and chief executive of Penguin, will be chairman of Penguin Random House and Markus Dohle, currently chief executive of Random House, will be its chief executive.
ENGADGET: Penguin and Random House merge, promise a brave new e-book future
To protect Pearson's interests as a minority shareholder, if Bertelsmann declines a Pearson offer to sell its entire shareholding, Pearson may require a recapitalisation by which Penguin Random House raises debt of up to 3.5x EBITDA, with a dividend distributed to shareholders in line with their ownership.
ENGADGET: Penguin and Random House merge, promise a brave new e-book future
Penguin and Random House, by many accounts the two largest trade publishers in the world, have agreed to merge operations.
FORBES: Five Thoughts on a Penguin-Random House Merger: Rapid Reaction
Pearson and Bertelsmann today announce an agreement to create the world's leading consumer publishing organisation by combining Penguin and Random House.
ENGADGET: Penguin and Random House merge, promise a brave new e-book future
Pearson and Bertelsmann intend that the combined organisation's level of organic investment in authors and new product models will exceed the total investment of Penguin and Random House as independent publishing houses.
ENGADGET: Penguin and Random House merge, promise a brave new e-book future
Once again, a self-published author has bested the competition from the likes of Penguin, Random House, Amazon, Macmillan and many other major players to climb atop the ebook best-seller list.
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In reviewing the long-term trends and considerable change affecting the consumer publishing industry, Pearson and Bertelsmann both concluded that the publishing and commercial success of Penguin and Random House can best be sustained and enhanced through a partnership with another major international publishing house.
ENGADGET: Penguin and Random House merge, promise a brave new e-book future
Consumer publishing is a low-growth, low-margin business, but Pearson is probably stuck with Penguin Putnam because Bertelsmann, the only likely prospective purchaser, just bought Random House.
Random House is the leading English language publisher in the US and the UK, while Penguin is the world's most famous publishing brand and has a strong presence in fast-growing developing markets.
ENGADGET: Penguin and Random House merge, promise a brave new e-book future
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