German media giant Bertelsmann increases stake in Britain′s Penguin book chain | Business| Economy and finance news from a German perspective | DW | 11.07.2017
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German media giant Bertelsmann increases stake in Britain's Penguin book chain

The German conglomerate's move is worth up to $1 billion for struggling British-owned publisher Pearson. Bertelsmann's chief says the group is the clear worldwide number one in the publishing industry.

German media company Bertelsmann has increased its share in Britain's Penguin Random House and expects to add "more than 60 million euros" in additional profits for its shareholders.

Thomas Rabe, the company's chief executive, described the 173-year-old publishing house a 'success story' since the joint venture began in 2013, which combined Pearson's Penguin stamp with Bertelsmann's Random House.

Bertelsmann, which holds a 75 percent stake in the RTL Group, will guarantee "greater governance rights" through further investment, including the power to name the chairman of the board.

Markus Dohle, who sits on Bertelsmann's board, will remain as chief executive of the publishing house, which has secured rights for upcoming books about President Obama and his wife Michelle.

"Today's deal enables us to realize a significant amount of the value that we've helped to create (at Penguin Random House) whilst continuing to be part of what is the world's biggest and best trade publisher," said the company's chief executive John Fallon.

"We'll be using the proceeds to maintain our strong balance sheet, to invest in the ongoing digital transformation of Pearson and return 300 million pounds in excess capital to shareholders."

British publishing group Pearson has received a number of profit warnings in recent years, with the company selling off media stalwarts like The Financial Times and The Economist.

Pearson, now with only a 25 percent share in the publisher, plans to give £300 million to shareholders via a share buyback, although the company's share price fell six percent on Tuesday.

Confirmation of the agreement is to be confirmed in September, subject to the regulatory approval.

rd/ (RTRE, AP)

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