Behind Penguin and Random House merger: With e-books changing the dynamics of publishing, Penguin and Random House merge to protect their turf.

Abstract

Penguin, however, strongly denies that Amazon's squeeze was the sole trigger for the merger. "The strategic rationale has more to do with looking five to 10 years out, and thinking about how we can create a publishing company for the future, one which will have more resources to invest in diverse content, new formats, channels and so forth," says Rebecca Sinclair, Communications Director, Penguin, UK.

"We have taken advice and wouldn't have got to this point if we didn't think we have a good chance of success," says Sinclair. Random House's parent company, the Germany-based Bertelsmann SE & Co. will hold 53 per cent in the new entity, with Penguin owner Pearson Plc holding the rest.