Nov 1, 2012

Despite renos, Penguin House can’t match Amazon McMansion

The merger of publishers Penguin and Random House will trigger more takeover activity. And the impact will trickle down to all aspects of the industry, writes Scribe publisher Henry Rosenbloom.

The “merger” of Penguin and Random House is, like all such deals, a takeover by another name. In this case, it’s a slow-motion takeover (it will take three or five years to be completed, depending on circumstances), after which either side can buy out the other.

But given it was Penguin’s owner, Pearson, that put its UK subsidiary on the block, and that Bertelsmann, Random House’s owner, starts off with 53% of the merged entity, I agree with my friend Andrew Franklin, the founder and managing director of Profile, who wrote in The Independent: “It’s a racing certainty that the UK holding will be bought out by the deeper pockets of the richer German company.”

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