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Penguin merger talks with Random House lift Pearson shares | |
(35 minutes later) | |
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 confirmed the talks after the markets closed on Thursday. | |
They are seen as part of its plans to focus the business on education. | |
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. |
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. |