By Archibald Preuschat
FRANKFURT--The chief executive of German media company
Bertelsmann SE Thomas Rabe said Monday he is confident that the
planned merger between its Random House unit and Pearson PLC's
(PSO) Penguin Group will receive the approval of regulatory
authorities.
However, Mr. Rabe told Dow Jones Newswires doesn't think the
merger will be finalized until the second half of 2013 due to the
number of regulatory authorities involved. As well as bodies from
the European Union and the U.S., the deal may need to be approved
by competition authorities in Australia and New Zealand.
In addition, competitors such as News Corp., which also owns Dow
Jones Newswires, publisher of this newswire and The Wall Street
Journal, may submit a counter-offer for Penguin. "It don't want to
speculate, this is a matter for Pearson and I can only say that we
have a valid contract," Mr. Rabe said.
The German and U.K. publishing houses said Monday they want to
merge the two segments in a deal thought to be worth between $2
billion and $3 billion, with Bertelsmann holding 53% in the joint
venture. "The percentage distribution reflects the relative value
of the business," is all Mr. Rabe would say on the matter.
In September, the Bertelsmann CEO said at a management meeting
he wanted to boost growth through acquisitions and strategic
partnerships. While Random House has a strong presence in Latin
America, Penguin is well represented in Asia, he said. The company
sees Brazil, India and China as its growth markets.
Bertelsmann will see first results from the merger from 2014,
said Mr. Rabe, who declined to elaborate on the synergies the deal
may generate. However, he said that Bertelsmann's publishing
business was stable and that the proposed deal would strengthen its
core business.
Write to Archibald Preuschat at
archibald.preuschat@dowjones.com
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