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Penguin discussing Random House merger Penguin merger talks with Random House lift Pearson shares
(35 minutes later)
Two of the world's biggest publishers, Penguin and Random House, are in talks about a possible merger. Shares in Pearson rose 1.5% in early trading on Friday following the announcement that it was in talks about merging its Penguin publishing house with rival Random House.
Pearson, which owns Penguin, issued a short statement to the London Stock Exchange confirming that the talks were taking place. Pearson confirmed the talks after the markets closed on Thursday.
Random House, which is owned by Germany's Bertelsmann, is the second biggest publisher in the UK, followed by Penguin. They are seen as part of its plans to focus the business on education.
It has had a very successful year, helped by the Fifty Shades series. Random House, which is owned by Germany's Bertelsmann, has recently become the biggest publisher in the UK, with Penguin at number three.
Random House has had a successful year, helped by the Fifty Shades series.
Among Penguin's best-sellers for the year have been Jamie Oliver's cookbooks.Among Penguin's best-sellers for the year have been Jamie Oliver's cookbooks.
Pearson warned there was no certainty that the talks would be successful.Pearson warned there was no certainty that the talks would be successful.
The Financial Times, which is also owned by Pearson, quoted sources saying that if the talks were successful, Bertelsmann would end up with more than 50% of the combined publisher.The Financial Times, which is also owned by Pearson, quoted sources saying that if the talks were successful, Bertelsmann would end up with more than 50% of the combined publisher.
"Pearson confirms that it is discussing with Bertelsmann a possible combination of Penguin and Random House," a company statement said."Pearson confirms that it is discussing with Bertelsmann a possible combination of Penguin and Random House," a company statement said.
"The two companies have not reached agreement and there is no certainty that the discussions will lead to a transaction. A further announcement will be made if and when appropriate.""The two companies have not reached agreement and there is no certainty that the discussions will lead to a transaction. A further announcement will be made if and when appropriate."
Pearson chief executive Marjorie Scardino is stepping down at the end of this year and will be replaced by John Fallon, currently head of Pearson's International Education division.Pearson chief executive Marjorie Scardino is stepping down at the end of this year and will be replaced by John Fallon, currently head of Pearson's International Education division.
Analysts have suggested he will continue to focus the business on education. This part of the business is crucial to its future growth strategy.
A merger between Penguin and Random House would be the biggest tie-up in the industry since the Lagardere bought Time Warner books to create Hachette in 2006.