The Commerce Commission has cleared Bertelsmann SE &
Co. KGaA (owner of Random House) and Pearson plc (owner of Penguin) to form a
new jointly-owned company - Penguin Random House- which will acquire the
consumer book publishing businesses of the two companies. Consumer books
exclude text books and technical books.
In assessing the clearance application, the Commission
looked at the potential impact of the merger in the markets for book publishing
rights, printed book distribution services provided to third party publishers
and the wholesale of books.
Commerce Commission Chairman Dr Mark Berry said, “In
reaching our decision, the Commission considered that, in each of the relevant
markets, the merged entity would be constrained from raising prices by a
combination of existing competitors and the countervailing power of large
customers.”
“As a result, the
Commission is satisfied that the proposed acquisition would be unlikely to
substantially lessen competition in any of the relevant markets,” said Dr
Berry.
A public version of the full written reasons for the
decision will be available shortly on the Commission‘s website at www.comcom.govt.nz/clearances-register
Background
Bertelsmann and Pearson applied for clearance in December
2012 to form a new jointly-owned company to be called Penguin Random House,
which will acquire the consumer book publishing businesses of Random House and
Penguin. Penguin and Random House both publish, import and distribute books in
New Zealand.
When considering a proposed merger, the Commission must
decide whether the competition that is lost in a market when two businesses
merge is substantial. We will give clearance to a proposed merger only if we
are satisfied that the merger is unlikely to have the effect of substantially
lessening competition in a market.
A fact sheet explaining how the Commission assesses a
merger application is available on the Commission’s website: www.comcom.govt.nz/merger-assessment/
Media contact: Allanah Kalafatelis, Communications
Manager Phone work (04) 924 3708, mobile 021 225 4417
Jenny Bridgen, Senior Communications Adviser Phone work
(04) 924 3709, mobile 021 225 4454
Commission media releases can be viewed at www.comcom.govt.nz/mediareleases
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