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Penguin Random House Acquires Santillana’s Trade Book Business

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Penguin Random House, the global trade book publishing group established last year by parent companies Bertelsmann and Pearson, announced on March 19, 2014 that on that date it signed agreements with Santillana, the book publishing business majority-controlled by the Spanish media conglomerate Promotora de Informaciones, S.A (PRISA), to acquire the trade book business of Santillana Ediciones Generales, which operates in Spain, Portugal, and Latin America (including Brazil). Before the merger of Penguin and Random House, the Big Six publishing houses accounted for 60% of the books published in the English language. Now this group is reduced to the Big Five, the other four publishers being: Hachette Group,[1] HarperCollins Publishers,[2] Simon & Schuster,[3] and The Macmillan Group.[4]

Penguin Random House Grupo Editorial, the publisher’s Spanish-language company, will purchase the Spanish-language and Portuguese-language trade book business companies of Santillana Ediciones Generales. Last year, Penguin Random House announced effective Monday, November 4, 2013 Random House Mondadori was renamed Penguin Random House Grupo Editorial and the Mondadori Publishing Imprint would take the name of Literatura Random House.

The acquired Spanish-language business will be merged with Penguin Random House Grupo Editorial in Spain, Portugal, and Latin America (except Brazil). The Spanish-language imprints being acquired include Aguilar, Alfaguara, Punta de Lectura, Suma de Letras, and Taurus.

Penguin Random House Brazil, Penguin Random House’s Brazilian holding company, will acquire Santillana’s Brazilian trade publishing business, Objetiva. In Brazil, the imprints being acquired are Alfaguara, Foglio, Fontanar, Objetiva, Ponto de Leitura, and Suma de Letras.

Markus Dohle, C.E.O of Penguin Random House, and Miguel Angel Cayuela, C.E.O. of Santillana, made the announcement. They expect the deal to close “once the relevant legal and administrative obligations are completed.”

Dohle said, “It is very exciting that our first international acquisition for Penguin Random House is the prestigious Santillana Ediciones Generales publishing group. It meets two of our major strategic goals: to strengthen our long-term commitment to Spanish-language book publishing as we increase our literary and commercial potential in one of the world’s most vital language markets, and to strengthen our publishing presence in Brazil. We will draw and build upon the great publishing traditions of Penguin Random House Grupo Editorial, Santillana Ediciones Generales, Companhia das Letras, and Objetiva, and the creativity and dedication of their enormously talented staff. With our combined company, we will be in an even stronger position to provide authors and booksellers with a tremendous variety of publishing opportunities, and readers with an incomparable range of reading choices. The union of Penguin Random House Grupo Editorial and Santillana’s trade book businesses will be ideal for bringing Spanish- and Portuguese-language authors to a wider global audience, together with achieving greater international reach for Penguin Random House.”

Santillana is shedding ancillary businesses involved in the publication of trade books to focus on its core business: education. Mr. Cayuela stated, “This was not an easy decision to make. However, these are times that require us to devote all our efforts to the very operations that defined us from the very beginning of our company, and our core business, which is education. Spurred by innovation and technology, we are experiencing a major transformation across the sector, and our hope and commitment is that Santillana will be a major player in this change. We now hope to put all our knowledge and ideas to work in the service of a new and better education program.” Cayuela thanked “especially the work done by all employees of Santillana’s general-interest publishing houses.”

Penguin Random House stated, "The combination of two highly-regarded Spanish trade book publishers will significantly increase Penguin Random House’s presence in Spain and Latin America. The acquisition of Objetiva gives Penguin Random House a fully-owned publishing presence in Brazil, South America’s biggest market."

Until the deal closes, Penguin Random House and Santillana Ediciones Generales operations will continue to operate independently. After the deal closes, Santillana Ediciones Generales operations in its Spanish-language territories and in Portugal will become part of Penguin Random House Grupo Editorial.

Núria Cabutí will continue in her role as Penguin Random House Grupo Editorial’s C.E.O., with the support of Armando Collazos, Global Director for Prisa Ediciones. The newly expanded business expects to publish 1,500 titles a year.

Penguin Random House Brazil, which also holds a 45% minority stake in Companhia das Letras, will acquire full ownership of Objetiva, which is located in Rio de Janeiro. Luiz Schwarcz will supervise the operations of Penguin Random House in Brazil, with the support of Roberto Feith, C.E.O. of Objetiva. Penguin Random House noted Feith is supported by “the highly regarded team which has made Objetiva one of the leading publishing houses in Brazil.” Schwarz will also continue as Director General of Companhia das Letras. Editora Objetiva publishes many leading Brazilian and international authors, including: Jon Lee Anderson, João Cabral de Mello Neto, Daniel Goleman, Daniel Kahneman, Stephen King, Haruki Murakami, Vladmir Nabokov, Joao Ubaldo Ribeiro, Mario Vargas Llosa, Luis Fernando Veríssimo, and Carlos Ruiz Zafón.

Companhia das Letras imprints are Boa Companhia, Claro Enigma, Companhia de Bolso, Companhia das Letras, Companhia das Letrinhas, Panelinha, Paralela, Penguin-Companhia (Classics), Portfolio-Penguin, Quadrinhos na Cia, and Seguinte. Among the authors they publish are Jorge Amado, Martin Amis, Paul Auster, Saul Bellow, Roberto Bolaño, Jorge Luis Borges, Chico Buarque,, Fernando Henrique Cardoso, Italo Calvino, J.M. Coetzee, Carlos Drummond de Andrade, Nick Hornby, Milan Kundera, Ian McEwan, Stieg Larsson, Vinícius de Moraes Alice Munro, George Orwell, Amós Oz, Orhan Pamuk, Fernando Pessoa, Philip Roth, Salman Rushdie, José Saramago, Jô Soares, Donna Tartt, and Érico Veríssimo.

Schwarcz stated, “It is an honor for Companhia das Letras to become a part of this fantastic, creative universe, which combines the best publishing houses in the world and a catalogue of authors that is unrivalled anywhere. It is also an unprecedented opportunity to broaden the promotion of Brazilian authors internationally, which Companhia das Letras has been intensely developing during the past years. It will be a tremendous privilege and great pleasure soon to be able to collaborate with Roberto Feith and the excellent team at Objetiva. In bringing together the storied heritages and outstanding authors of both companies we believe we can create a new standard for Brazilian publishing as we maintain the autonomy and editorial identities of our imprints.”

Feith observed, “For me and the team at Objetiva it is a unique opportunity and an immense source of satisfaction to become part of this superbly qualified publishing group, Penguin Random House. Additionally, after the closing of the deal, it will be a pleasure to work together closely with Luiz Schwarcz. We have been colleagues and friends for years, and Objetiva surely will benefit from his experienced leadership and his respect for our publishing programs.”

According to Penguin Random House, “With this acquisition, Penguin Random House Grupo Editorial will expand its consumer-publishing business in Spain, and in the high-growth Latin American markets, such as Santillana’s businesses in Mexico, Argentina, Colombia, Chile and Uruguay. It will also gain a new foothold through Santillana’s trade book businesses in Peru, Ecuador, Bolivia, Paraguay, Venezuela, Dominican Republic and Central America. Penguin Random House Grupo Editorial will have a new presence in Portugal, and expand its presence in the Spanish-language U.S. market. This transaction does not include the acquisition of Santillana’s children’s and young adult literature geared to schools and educational institutions.”

Penguin Random House Grupo Editorial as a newly combined company will maintain the editorial and entrepreneurial identity autonomy of all of its imprints. It will publish original Spanish-language and Spanish translations of adult and children’s fiction and nonfiction in hardcover, paperback and digital formats under Santillana’s trade book imprints Alfaguara, Aguilar, Altea, Fontanar, Punto de Lectura, Suma de letras, and Taurus, as well as under Penguin Random House Grupo Editorial’s existing imprints: Beascoa, Caballo de Troya, Collins, Conecta, Debate, Debolsillo, Fantascy, Grijalbo, Literatura Random House, Lumen, Montena, Nube de Tinta, Plaza & Janés, RHFlash, Rosa dels Vents, and Sudamericana.

The union of Penguin Random House Grupo Editorial and Santillana Ediciones Generales will create a complementary roster of Spanish and international authors, including many Nobel Prize winners such as Alice Munro, Mario Vargas Llosa, Gabriel García Márquez, José Saramago, J.M. Coetzee, Orhan Pamuk, Doris Lessing and V.S. Naipaul and Gunter Grass; Cervantes Award winners such as Juan Marsé, Jorge Edwards, Guillermo Cabrera Infante and Sergio Pitol; and Spanish National Literature Award winners Javier Cercas, Javier Marías, José María Merino and Luis Mateo Díez, among others. The international bestselling authors published by both groups include Isabel Allende, Claudia Bonelli, Jorge Luis Borges, Julio Cortázar, Joël Dicker, Umberto Eco, Albert Espinosa, Laura Esquivel, Ildefonso Falcones, Ken Follett, Carlos Fuentes, Elizabeth Gilbert, John Grisham, E L James, Stephenie Meyer, Kate Morton, Julia Navarro, Chimamanda Ngozi Adiche, Arturo Pérez-Reverte, Paul Preston, Quino, Marcela Serrano, Hiromi Shinya, and Manuel Vicent, among others.

Ms. Cabutí stated, “With Santillana Ediciones Generales we bring together the knowledge, experience and capabilities of two prestigiuous [sic] publishing groups dedicated to Spanish-language book content, both fully committed to their authors, agents, booksellers and colleagues. We will preserve the identity and independence of all imprints, as well as our publishing programs in both companies. Authors will remain our top priority. We always will strive to offer them the highest-quality editorial, marketing and distribution support for their books. This milestone event will enable us to offer our readers an unprecedented range of titles, along with our ongoing commitment to excellence across all markets in which we operate.”

Amando Collazos, Global Director of Prisa Ediciones, stated, “Following the decision of Santillana to strenghten [sic] operations in the education sector, and in light of the need to optimize global operations in a new, fast-changing environment, it gives us great satisfaction to know that a group with international leadership such as Penguin Random House will be providing continuity to the work our publishing teams have carried out in recent years to connect our authors with their readers.”

In related news, on December 13, 2013, Penguin Random House announced it had completed its purchase of Times Media Group’s majority stake in South Africa-based Random House Struik. Random House Struik was formed in 2008 following the merger of Random House South Africa and Struik Publishers to create a significant new player in the African book publishing industry.

The new company, known as Random House Struik, brought together two of the country’s most prominent book publishers, with The Random House Group holding a 49.9% stake and Times Media Group’s New Holland Publishing holding 50.1%. Following the acquisition, Penguin Random House took 100% ownership of Random House Struik.

Penguin Random House stated, “Random House Struik and Penguin Books South Africa will now work in close cooperation under the excellent respective leaderships of Steve Connolly and Stephen Johnson with a view to integrating the businesses within Penguin Random House in 2014.” Random House Struik locally publishes books written in both English and Afrikaans, under the Struik Lifestyle, Struik Nature, Struik Travel & Heritage, Fernwood Press and Zebra Press non-fiction imprints and the Umuzi fiction imprint. It also promoted Random House’s global catalog of titles.

[1] Hachette Publishing Group is owned by Hachette Livre which publishes books. Owned by the French media conglomerate Lagardère, it is also known as Lagardère Publishing. [Lagardère Active SAS publishes magazines, owns and operates radio and television stations, and produces content. Lagardère Services owns subsidiaries that operate duty-free shops in Europe, produces unscripted television shows (news, celebrity gossip shows, etc.), and publishes Auto Moto magazine. One subsidiary, Atlantique Productions produces dramas. Another subsidiary, Armand Colin, is even another publishing house. It publishes books in the humanities and social sciences and scholarly journals. Lagardère Unlimited handles sporting event broadcast rights, events management, professional sports marketing and associated products, represent professional athletes, and manages sports academies.] In 2006, Lagardère acquired the Time Warner Book Brook (which included Little, Brown & Company) from Time Warner and renamed it the Hachette Publishing Group. Under the new parent company, Warner Books, which published the likes of James Patterson and Nicholas Sparks, became Grand Central Publishing, as Julie Bosman reported in The New York Times. Hachette Livre is the largest publisher of trade books in France, the second-largest in the U.K. and Spain, and the fifth-largest in the U.S. Last June, Hachette Publishing Group announced it would acquire Hyperion Books from The Walt Disney Company. It thus gained a catalog including Mitch Albom’s The Five People You Meet in Heaven and Jamie Oliver’s Jamie’s Food Revolution. Under the deal, The Wald Disney Company will continue to publish Disney-Hyperion branded books for children, as reported by Bloomberg’s Edmund Lee.

[2] HarperCollins is a subsidiary of Rupert Murdoch’s News Corporation, which publishes newspapers and books. [It is also called the New News Corporation.] In 2012, Murdoch spun-off the publishing business from 21st Century Fox, the larger successor to his original news corporation, which controls Fox Entertainment, the divisions of which include the movie studio 20th Century Fox Film Corporation, Fox Studios Australia; the animation studio Blue Sky Studios, 20th Century Fox Television (which produces and distributes television shows), Fox Television Studios (which also produces television shows), 20th Television (which handles syndication rights of television shows produced by 20th Century Fox or for FOX Broadcasting Company); 20th Century Fox Home Entertainment (which produces DVDs and Blu-ray Discs of 20th Century Fox movies, MGM movies, United Artists movies, and FOX television shows); the television network FOX Broadcasting Company; Fox Television Stations Group; Fox News Channel; Fox Business Network; FX; FXX; Fox Movie Channel; and Fox Latin America. Big Ten Network is co-owned with the Big Ten Conference and the National Geographic Channels are co-owned with the National Geographic Society. 21st Century Fox also owns Star TV, a pan-Asian television service. Sky is the name brand for a group of direct-broadcast satellite pay-television platforms. 21st Century Fox owns Sky Italia; a 39.14% stake in British Sky Broadcasting Group, which operates in the U.K. and Ireland; and a 54.5% stake in Sky Deutschland, which operates in Germany, Austria, and Switzerland. British Sky also offers broadband Internet and telephone services. A third company, News Corp. Australia (formerly News Limited), owned by the New News Corporation, publishes 142 Australian newspapers and magazines, performs mark research, runs Web sites, distributes movies, and owns Fox Sports Australia. The Australian pay television company Foxtel is a joint venture with Telstra Corporation.

[3] Simon & Schuster, Inc. is a division of the media conglomerate CBS Corporation, which is majority-owned by National Amusements, a family-owned company controlled by Sumer Redstone, who serves as Executive Chairman of CBS. In 2006, Redstone split Viacom, Inc. in two. The name Viacom was retained by a new parent company for Paramount Pictures Corporation, BET Networks, and MTV Networks, while the other operating companies were to be controlled by a new CBS Corporation. In addition to Simon & Schuster, those other operating companies are the television network CBS Broadcasting; CBS Radio (formerly Infinity Broadcasting Corporation); CBS Interactive (which operates Web sites); CBS Outdoor (which owns billboards); CBS Records, CBS Sports Network; CBS Television Distribution (which handles distribution rights for syndication of television shows from the CBS library and television shows, miniseries, and telefilms made by Paramount); CBS Television Studios (a successor to CBS Productions, Inc., Desilu Productions, Inc., and Spelling Television that produces television shows mostly for CBS and The CW); and Showtime Networks, Inc. (which includes Showtime, The Movie Channel, and the Smithsonian Networks). The CW is a joint venture with Warner Bros. Entertainment, a subsidiary of Time Warner. TVGN is a joint venture with Lions Gate Entertainment.

[4] Macmillan Education and Macmillan Publishers being divisions of Verlagsgruppe Georg von Holtzbrinck (known in English as the Holtzbrinck Publishing Group), a family-owned company based in Stuttgart, Germany.

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