Press Release

Morgan Lewis Advises Pearson on Penguin JV With Bertelsmann’s Random House

Monday, October 29, 2012

NEW YORK, October 29, 2012: Pearson plc, the world's leading learning company, and international media company Bertelsmann today announced an agreement to combine the activities of their respective book publishing companies, Penguin Group and Random House, to create the world's leading consumer publishing organization. Under the terms of the agreement, Penguin and Random House will combine their businesses in a newly-created joint venture named Penguin Random House of which Gutersloh, Germany-based Bertelsmann will own 53% and London-based Pearson will own 47%. The closing of the transaction is expected to take place in the second half of 2013, following customary regulatory and other approvals including merger control clearances.

Penguin Random House will include all publishing divisions and imprints of Random House and Penguin in the U.S., Canada, the UK, Australia, New Zealand, India and South Africa, as well as Penguin's publishing company in China, and Random House's Spanish-language publishing operations in Spain and Latin America. Random House's Munich-based German-language publishing company Verlagsgruppe Random House will not be part of the JV and will remain at Bertelsmann, and Pearson will retain rights to use the Penguin brand in education markets worldwide. Under the terms of the agreement, neither Pearson nor Bertelsmann may sell any part of their shareholding in Penguin Random House for three years.

Morgan Lewis served as legal adviser to Pearson on the transaction. The Morgan Lewis deal team was led by Business & Finance partners Benjamin Wills and Charles Engros and Business & Finance associates Kevin Shmelzer, David Tsin, Frederick Schaudies and Whitney Montgomery and included partners Ron Dreben (Intellectual Property), Harry Robins (Antitrust), Richard Zarin (Tax), Gary Rothstein (Employee Benefits) and Vito Petretti (Global Outsourcing, Technology and Commercial Transactions).