Currently the local printing for the two publishers is mainly handled by Griffin Press for Random House, with McPherson’s taking the Penguin jobs. However the new merged entity may want to have just one main supplier, which means a big win and a big loss are up for grabs.

In a statement announcing the deal Pearson said, “The organisation will generate synergies from shared resources such as warehousing, distribution, printing and central functions.”

Under the deal the owner of Random House – German publishing giant Bertelsmann – will become majority owner of the new entity with a 53 per cent stake, while Pearson-owned Penguin will have a 47 per cent share in the new entity, which will be called Pearson Random House.

Between them the two publishers have sales of more than A$4bn, with Random House generating about 60 per cent and Pearson about 40 per cent of that figure.  Well know authors with the company include celebrity chef Jamie Oliver and mummy porn writer EL James.

Rupert Murdoch may well try and crash the merger party, his book publisher Harper Collins is thought to be preparing a separate $1bn bid for Penguin.

The merger is an attempt on the part of both companies to cut costs and face the challenge of the ebook market. Pearson says Penguin revenue from ebooks had soared 35 percent in the third quarter from a year earlier, helped by demand for titles including Mark Owen’s No Easy Day and Ken Follett’s Winter of the World. Kindle sales are growing rapidly around the world.

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