Penguin, Random House merger could be worth $20m to PMP, Opus

Sources have suggested that the proposed deal between the two publishing giants could represent up to $20 million of local printing work.

German media group Bertelsmann, which owns Random House, would have a 53% stake and Penguin’s parent, UK publisher Pearson, would have a 47% share in the new business, which would be called Penguin Random House. The deal is expected to be completed in the second half of 2013.

A successful merger would have a significant Australian impact if the new entity decided to consolidate its printing with a single supplier.

Each publisher has a preferred supplier deal with a specific print group, though these are non-exclusive. 

PMP’s Griffin Press is the key supplier to Random House, while Penguin’s local printing is largely handled by Opus firm McPherson’s Printing Group.

Industry sources told ProPrint that the combined value of their annual print work could be worth $10 million to $20 million.

The nature of bookselling means exact values are hard to judge: a major success like Fifty Shades of Grey, Twilight or Harry Potter can create a huge spike in volumes for the book printer.

[Related: PMP cashes in on Fifty Shades of Grey]

Griffin Press general manager Ben Jolly was hopeful the Adelaide-based printer would supply the new publisher.

“I would hope so. I would think so, but it’s too early to tell,” he said.

Opus Group could not be reached for comment.

ProPrint understands that printing contracts of this nature typically last for two or three years. Publishers use Australian printers for regular work such as paperbacks, but send more complicated jobs like hardcovers and expensive colour work overseas. Publishers prefer to have one local supplier, which could lead to a consolidation of book printing contracts in late 2013.

Jolly said it was too early to speculate on what the merger would mean for Australia, but said he didn’t expect it to affect volumes, at least in the short term.

[Related: Opus acquires McPherson’s Printing Group]

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