Penguin and Random House to merge in £2.4bn deal Marjorie Scardino, chief executive of Pearson, added: "Together, the two publishers will be able to share a large part of their costs, to invest more for their author and reader constituencies and to be more adventurous in trying new models in this exciting, fast-moving world of digital books and digital readers." The deal comes at a critical time for the companies, as well as for the wider book publishing industry which spent most of the last decade in major turmoil, as new online businesses like Amazon, Google and Apple tried to stake their claims on their traditional business. It will also scupper plans by media tycoon Rupert Murdoch, who was reportedly mulling a £1bn cash offer for the book publisher. Heavy discounting by online retailers and supermarkets has made it harder and harder for specialist book chains and independent booksellers to survive, leaving publishers with many fewer places to sell their products. Meanwhile, the rapid adoption of ebooks has driven prices down further, increased competition from self-published authors and made it considerably easier for people to get their hands on pirated copies of books. The two companies are likely to face major regulatory issues before they get a deal away, with their rivals likely to call for competition authorities on both sides of the Atlantic to review the deal.