16 December 2019


Pearson is selling its remaining 25% stake in Penguin Random House to Bertelsmann, as its c.e.o. John Fallon prepares to retire next year.

The disposal of PRH to its co-owning partner, which already had a 75% stake in the trade publisher, will generate net proceeds of roughly £530m, Pearson said. Shareholders will see a return through a £350m share buyback commencing in early 2020, with the deal expected to close in the first half of 2020. The deal will see Bertelsmann become sole owner of the world's biggest trade publishing group. 

Outgoing Pearson c.e.o. Fallon said of the sale, part of an ongoing process of “simplification” for Pearson, that it enabled the company “to be completely focused” on its education and digital learning business. 

The transaction puts a value on the PRH venture of $3.67bn, compared with the $3.55bn enterprise valuation in 2017 when Pearson sold a 22% stake in the joint venture. In 2018 PRH reported revenues of $3.7bn. The company’s total stake in PRH has generated about £1.9bn in net disposal proceeds and dividends for Pearson. 

“For almost 50 years, Pearson has been proud to play our part in the publishing and commercial success of first Penguin and then more recently Penguin Random House,” said Fallon. “With the sale of our remaining stake to our partners, Bertelsmann, we know the company is in good hands—and we wish our colleagues and authors every future success. This enables Pearson now to be completely focused on building the world’s leading digital learning company, linking education to employability and skills, and reaching more learners around the world to support them through a lifetime of learning.”