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| Penguin merger talks with Random House lift Pearson shares | Penguin merger talks with Random House lift Pearson shares |
| (35 minutes later) | |
| Shares in Pearson rose 1.5% on Friday following the announcement that it was in talks about merging its Penguin publishing house with rival Random House. | Shares in Pearson rose 1.5% 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. | Pearson confirmed the talks after the markets closed on Thursday. |
| They are seen as part of its plans to focus the business on education. | 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, 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. | 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. |
| "It's a recognition that they don't individually have the scale to be able to stand up to companies like Amazon or Apple," Philip Downer, former chief executive of Borders UK who now runs the retail consultancy Front of Store, told the BBC. | "It's a recognition that they don't individually have the scale to be able to stand up to companies like Amazon or Apple," Philip Downer, former chief executive of Borders UK who now runs the retail consultancy Front of Store, told the BBC. |
| He also said that the big trade publishers were looking a bit out of place in the media conglomerates that own them. | He also said that the big trade publishers were looking a bit out of place in the media conglomerates that own them. |
| "What were, 10 or 20 years ago, prestige holdings now look more challenged in a multimedia world," Mr Downer added. | "What were, 10 or 20 years ago, prestige holdings now look more challenged in a multimedia world," Mr Downer added. |
| 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. |
| The group sees this part of the business as 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. | 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. |
| "On the down side it would leave much less competition among publishers for authors," said Liz Thomson from the book industry website Bookbrunch. | "On the down side it would leave much less competition among publishers for authors," said Liz Thomson from the book industry website Bookbrunch. |
| "On the plus side Random House is quite a creative publisher - they do allow their imprints to flourish," she told BBC News. | "On the plus side Random House is quite a creative publisher - they do allow their imprints to flourish," she told BBC News. |
| "So there's a mixture of things, but I think one would say overall it is not a good thing for the industry." | "So there's a mixture of things, but I think one would say overall it is not a good thing for the industry." |