Pearson to sell a 22% stake in PRH to Bertelsmann
Pearson will sell a 22% stake in Penguin Random House (PRH) to co-shareholder Bertelsmann, whose share of the company will increase to 75%, reports the Bookseller.
Pearson will retain a 25% stake in the company in an agreement that values the publisher at US$3.55bn (A$4.65bn), including debt.
Bertelsmann said its increased share in the company will have ‘no effect’ on PRH, with the independence of the group’s 250-plus publishers to remain ‘unaffected’. Markus Dohle will remain CEO.
As previously reported by Books+Publishing, in January Pearson announced its intention to sell its 47% stake in PRH. Bertelsmann said at the time that it was ‘open’ to increasing its share if ‘the financial terms are fair’.
The agreement will inject approximately US$1bn (A$1.3bn) back into the Pearson business, which posted a pre-tax loss of £2.6bn (A$4.38bn) for the year to February 2017 following challenges in the US education market.
Bertelsmann chairman and CEO Thomas Rabe said PRH is ‘a success story’. ‘We completed the integration in a very short time, and today the group is the clear worldwide number one in book publishing.’
Pearson CEO John Fallon said he wasn’t aware of any unease among publishers and authors about the agreement. ‘I do think the PRH joint venture has proved to be good for the industry,’ said Fallon. ‘I think that having a strong, well run, commercially successful trade publisher that has done well in commercial and literary fiction, and nonfiction, and has proved itself able to expand internationally, is good for the industry. We’re proud of the role we played in creating that [and] we’re proud we will continue to be a part of that for some years to come.’
Category: International news