BRUSSELS--European Union regulators have given the unconditional
green light to the proposed merger between Bertelsmann SE &
Co.'s Random House and Pearson PLC'S (PSON.LN) Penguin Group,
another step on the way to create the world's biggest publishing
house.
The two companies in October said they intended to merge later
this year into Penguin Random House, with Bertelsmann owning a 53%
stake and Pearson owning 47%. The merger is expected to close in
the latter part of this year, pending regulatory approvals
elsewhere.
The European Commission, which acts as the European Union's
anti-trust watchdog, said Friday the deal posed no threat as the
merged company would continue to face strong competition.
"Penguin Random House will continue to face competition from
several large and numerous small- and medium-sized publishers," it
said in a statement. "As regards the sale of English language
books, the merged entity will furthermore face a concentrated
retail base, such as supermarkets for print books and large online
retailers for e-books, like Amazon."
Random House is the largest book publisher in the U.S. and the
U.K., and Penguin is second-largest player in the US and third in
the U.K.
The EU's regulatory approval comes nearly two months after the
U.S. Justice Department gave its backing without restrictions.
Canada and China are among the countries still reviewing the
deal.
Industry experts say Penguin Random House could represent around
one quarter of global English-language consumer book sales.
Penguin Random House will include all of the English-language
trade publishing divisions of Bertelsmann's Random House division
in the U.S., Canada, the U.K., Australia, New Zealand, India and
South Africa, as well as the Spanish language trade-publishing
divisions of Bertelsmann's Random House division in Spain and Latin
America.
Write to Vanessa Mock at vanessa.mock@dowjones.com
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