Publishers Random House, Penguin In Merger Talks

The book industry is buzzing with the news that Random House and Penguin, the two largest publishing houses in the U.S., could be headed for a merger. The two companies publish such best-selling authors as John Grisham and Tom Clancy.

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STEVE INSKEEP, HOST:

NPR's business news starts with a possible publishing powerhouse.

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INSKEEP: The book industry is buzzing with this news: Random House and Penguin, the two largest publishing houses in the United States, could be headed for a merger. NPR's Lynn Neary reports.

LYNN NEARY, BYLINE: The British conglomerate Pearson, responding to rumors in the European media, has confirmed that it is in discussions about merging Penguin with Random House, which is owned by the German company Bertelsmann. But Pearson made it clear that it's not certain the discussions will lead to an agreement. Literary Agent Miriam Goderich says it's early to speculate on the effects of such a merger. But if it happened, it would definitely shake up the industry.

MIRIAM GODERICH: It would be a huge, huge development - if it came to pass.

NEARY: It's not clear, at this point, what kind of savings would be achieved through a merger. But the industry is looking for ways to offset losses resulting from the popularity of lower-priced e-books. Goderich says the merger could lead to layoffs, and would likely make it harder for literary agents to negotiate the best deals for their authors.

GODERICH: Right now, Penguin and Random House often compete against each other, for the same projects. If you have one superstructure, that's one less house that you can go to.

NEARY: Questions are already being raised about whether the combination of two such huge publishing companies, would create antitrust issues.

Lynn Neary, NPR News, Washington.

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