PARIS — The U.S. Justice Department has cleared the proposed merger of Random House and Penguin, which would create the biggest book publisher in the world, their parent companies said Thursday.
The Justice Department imposed no conditions on the German media company Bertelsmann, which owns Random House, and its British counterpart Pearson, the parent of Penguin, thereby removing a significant hurdle to the deal. Still, the proposed formation of Penguin Random House faces other regulatory reviews, most notably by the European Commission.
“This positive first decision by one of the antitrust authorities is an important milestone on the path to uniting two of the world’s leading publishing companies into a truly global publishing group,” said Thomas Rabe, chief executive of Bertelsmann, in a statement.
Bertelsmann and Pearson announced plans last year to merge the two publishers into a single concern that would have about 25 percent of the English-language consumer book market. Under the agreement, no money is changing hands, but Bertelsmann is set to control 53 percent of the combined entity.
Executives say greater scale will help the publishers develop new digital publishing models, as they hope to profit from the growth of e-books. It would give them greater heft to negotiate with Internet giants like Amazon, Apple and Google, which play an ever more important role in the distribution of books. Penguin and Bertelsmann say they also hope to expand their presence in emerging markets.
“Penguin Random House points the way to the international future of the book,” Mr. Rabe said.
Analysts had generally expected the U.S. antitrust authorities to approve the deal, saying Europe was more likely to pose problems. The European Commission scrutinizes any merger in the culture sector with special care, as evidenced by the tough conditions it recently imposed on Universal Music Group in its purchase of the recording company EMI.
Executives of Pearson and Bertelsmann have said they will seek to wring cost savings out of the combined back-office operations of the two publishers, without cutting from the editorial operations.
Both companies said Thursday that they still expected the agreement to close in the second half of this year.
Article source: http://www.nytimes.com/2013/02/15/business/global/us-regulators-approve-random-house-merger-with-penguin.html?partner=rss&emc=rss