Pearson to sell 22% of Penguin Random House to Bertelsmann for $1 billion
Bertelsmann will own 75% and Pearson will be left with 25% in Penguin Random House after the sale
London: British publisher Pearson said on Tuesday it has agreed to sell almost half of its stake in Penguin Random House (PRH) to joint venture partner Bertelsmann.
The 22% stake in PRH is being offloaded for $1.0 billion (€877 million), a Pearson statement said. Bertelsmann will then own 75% and Pearson will be left with 25%.
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Pearson had in early 2017 signalled its intention to lower its holding in PRH.
The transaction values PRH at $3.55 billion. The joint venture—billed as the world’s leading mass publisher—was created in 2013 by combining Pearson’s Penguin imprint with Bertelsmann’s Random House.
London-listed Pearson added that it would use the proceeds to strengthen its balance sheet and return £300 million to shareholders via a share buyback. Pearson also said it would continue to maintain a “significant” income stream from its remaining share in Penguin.
The deal is expected to complete in September 2017, subject to regulatory approval.
Back in January, Pearson issued a gloomy profit warning that sent its share price tumbling—and said it would sell holdings in PRH.
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The company is largely dependent on the education market, after it shed the Financial Times newspaper and half of the Economist Group in 2015.
In a radical restructuring in early 2016, Pearson axed 4,000 jobs—or 10% of its workforce—in an effort to combat weak demand.