Press Release – Commerce Commission

The Commerce Commission has cleared Bertelsmann SE & Co. KGaA (owner of Random House) and Pearson plc (owner of Penguin) to form a new jointly-owned company – Penguin Random House- which will acquire the consumer book publishing businesses of the two …Commerce Commission clears merger of Penguin and Random House book publishers

The Commerce Commission has cleared Bertelsmann SE & Co. KGaA (owner of Random House) and Pearson plc (owner of Penguin) to form a new jointly-owned company – Penguin Random House- which will acquire the consumer book publishing businesses of the two companies. Consumer books exclude text books and technical books.

In assessing the clearance application, the Commission looked at the potential impact of the merger in the markets for book publishing rights, printed book distribution services provided to third party publishers and the wholesale of books.

Commerce Commission Chairman Dr Mark Berry said, “In reaching our decision, the Commission considered that, in each of the relevant markets, the merged entity would be constrained from raising prices by a combination of existing competitors and the countervailing power of large customers.”

“As a result, the Commission is satisfied that the proposed acquisition would be unlikely to substantially lessen competition in any of the relevant markets,” said Dr Berry.
A public version of the full written reasons for the decision will be available shortly on the Commission‘s website at www.comcom.govt.nz/clearances-register

Background
Bertelsmann and Pearson applied for clearance in December 2012 to form a new jointly-owned company to be called Penguin Random House, which will acquire the consumer book publishing businesses of Random House and Penguin. Penguin and Random House both publish, import and distribute books in New Zealand.

When considering a proposed merger, the Commission must decide whether the competition that is lost in a market when two businesses merge is substantial. We will give clearance to a proposed merger only if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.

A fact sheet explaining how the Commission assesses a merger application is available on the Commission’s website: www.comcom.govt.nz/merger-assessment/
ENDS

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