Merger unveiled for Penguin and Random House Pearson has unveiled a deal to merger its Penguin book-publishing arm with Random House, which is owned by German company Bertelsmann. The new venture, which will be called Penguin Random House, will have an estimated one quarter share of the market for English language book sales and generate annual revenues in the region of £2.5 billion. Pearson will have a 47 per cent stake with Bertelsmann holding the rest. The deal still requires regulatory clearance and is not expected to complete until the second half of next year. There is also the possibility that a rival party may derail the partnership, with HarperCollins owner News Corporation reportedly interested in making a £1bn offer for Penguin. Unveiling today's deal, the two companies said the tie-up will deliver "significant benefits" such as shared resources and a greater level of investment in authors and products than would be possible as standalone firms. The combined company would be home to writers as diverse as Random House's Jack Reacher creator Lee Child and Fifty Shades of Grey's EL James and Penguin's long list of classical authors such as Charles Dickens and Jane Austen. London-based Penguin employs 5,500 people worldwide, with around 950 in the UK. Random House has 5,300 staff globally and last year its sales accounted for just under 15 per cent of the UK market, compared with Penguin's 11 per cent. Penguin is one of the most-recognisable brands in the world, having been set up by Allen Lane in 1935. The other publishers in the "big six" are Hachette, Simon & Schuster and Macmillan. Their power to set prices has been eroded by the boom in digital sales and the rise of Amazon, which reportedly controls an estimated two-thirds of American print and ebook sales. Paul Richards, an analyst at Numis Securities, said it was "a sensible deal." He added: "The structure of the deal is broadly as expected. A sensible deal that should generate healthy synergies.