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Random House, Penguin parent companies win EU approval to merge

The parent companies of book publishers Random House and Penguin have won clearance from European Union anti-trust regulators to move forward with their merger.

We first told New York readers about this proposed merger in October, when Bertelsmann, the German company behind Random House, and the British company Pearson, the owner of Penguin, said they wanted to combine forces to better compete in an evolving publishing market.

The EU's anti-trust regulators said they are comfortable with the merger because the newly combined company will still have several strong competitors.

U.S. and New Zealand regulators have already given the proposed merger their blessing. Approval is still needed from China, Austria and Canada, but at least so far, it does not seem there is any serious danger that their go-ahead will not be granted.

Together, Penguin and Random House represent some of the world's best-selling authors, including "50 Shades of Grey" scribe E.L. James and fantasy novelist Terry Pratchett.

However, changing tides in the publishing industry have meant that both companies need to adapt -- and quickly.

Readers are shifting away from hard-copy books to e-readers, which are tightly controlled by Amazon and Barnes & Noble. Because of that, book publishers are seeing their ability to set publishing schedules and determine prices get undermined. There is also a trend of authors circumventing publishers entirely, opting instead to self-publish on web-based services.

We thought this was a story worth noting because it shows how companies that operate internationally must comply with multiple nations' laws, not just those in the U.S.

Source: Reuters, "Random House, Penguin merger wins EU approval," April 5, 2013

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