On October 29, 2012 Bertelsmann, based in Gütersloh, Germany and Pearson, based in London, announced that they planned to combine their book publishing divisions, Random House and Penguin. This merger, which could put as much as 25% of the American new book production in the hands of one company, was seen as the result of the growing power in the eBook market of dominant technology companies including Amazon, Apple and Google which pressured publishers to adjust their eBook strategy during a period in which traditional brick and mortar bookstores were disappearing.
"Under the agreement, Bertelsmann, which owns Random House, would control 53 percent of the merged publishers. Bertelsmann and Pearson would share executive oversight, with Markus Dohle of Random House serving as chief executive and John Makinson of Penguin becoming the chairman.
"The deal would consolidate Random House’s position as the largest consumer book publisher in the English-language world, giving the combined companies greater scale to deal with the challenges arising from the growth of e-books and the rise of Internet retailers like Amazon.
“ '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,' said Marjorie Scardino, chief executive of Pearson, which is based in London.
"By taking control of the company, Bertelsmann . . . hopes to avoid the problems that plagued a 50-50 partnership with Sony of Japan, in which the two companies combined their music recording divisions. The venture, Sony BMG, was riven by management turmoil and differences over strategy, prompting Bertelsmann to sell its share to Sony eventually" (http://www.nytimes.com/2012/10/30/business/global/random-house-and-penguin-to-be-combined.html, accessed 10-29-2012).