The owners of Penguin Group and Random House are in merger talks that could result in a combined entity that controls about 20 percent of the U.S. market, the Financial Times said Thursday.
Britain's Pearson PLC (NYSE:PSO), which owns Penguin, and Germany's Bertelsmann AG, which owns Random House and Knopf Doubleday, are two of the largest publishers in the world. But they face robust competition from the rise of e-book publishing, driven by such companies as Amazon.com Inc. (Nasdaq:AMZN), Google Inc. (Nasdaq:GOOG) and Apple Inc. (Nasdaq:AAPL), said the Financial Times, which is owned by Pearson.
"Pearson confirms that it is discussing with Bertelsmann a possible combination of Penguin and Random House. The two companies have not reached agreement, and there is no certainty that the discussions will lead to a transaction," Pearson said in a statement.
If a transaction is effected, Bertelsmann is expected to own more than half the venture, the New York Times said.
Talks with antitrust regulators in Europe and the United States already have begun, the Guardian said. Potential antitrust concerns arise from the possibility that a Penguin-Random House combination would control about one fifth of U.S. book publishing.
Pearson's American Depositary Receipts rose 16 cents to $19.62 in afternoon trading.