Is a merger in the works for Penguin and Random House?

Penguin House?

Are the big six publishers about to become the giant four? According to the Financial Times, Bertelsmann and Pearson are in talks to merge their respective publishing divisions, Random House and Penguin.
If a deal is successful, inside sources say Bertelsmann would reportedly have a stake of more than 50 per cent, with both companies’ CEOs taking leadership roles.
Although rumours of a merger have been floating around for a few months, it is still unclear whether the deal could pass competition regulations in certain countries.
In August, German publication Manager Magazin first reported on the talks, also suggesting a deal between Random House and News Corporation division HarperCollins was a possibility. A Bertelsmann spokesperson called the story “speculation.”

UPDATE: Pearson has released a statement confirming “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. A further announcement will be made if and when appropriate.”

Quill & Quire.