October 24, 2014
Penguin Random House buys Alfaguara
Acquisition of leading Spanish publishing labels reaches US$100 million
Spanish media group Prisa said yesterday it had agreed to sell Alfaguara, publisher of Nobel-prize-winning author Mario Vargas Llosa and several other editorial brands, to Penguin Random House for 72 million euros (US$100 million).
Penguin Random House is majority owned by German media group Bertelsmann, while Pearson, the owner of the Financial Times, holds a minority stake. Bertelsmann and Pearson last year completed the merger of their publishers Penguin and Random House. On July 1, 2013, Bertelsmann and Pearson merged their respective trade book publishing divisions to form Penguin Random House in the US, Canada, the UK, Australia, New Zealand, India, China, South Africa, Spain, Mexico, Argentina, Colombia, Uruguay, and Chile.
Alfaguara — directly owned by Santillana, a publishing house controlled in turn by Prisa — is one of Spain’s best-known book publishers, founded by celebrated novelist and Nobel prize-winner Camilo José Cela in the 1960s. Prisa, which publishes Spain’s most-read quality newspaper El País, has been restructuring its debt burden of over 3 billion euros (US$4.15 billion) and selling off assets. It said in a statement it was selling other Spanish-language publishing brands alongside Alfaguara, excluding those operating in educational publishing, which makes up 87 percent of Santillana’s income.
The news of the possible sale of Alfaguara had been circulating for months and finally the deal was made public yesterday, one day before the announcement of the Alfaguara Novel Prize. Besides Alfaguara, the sale affects the Taurus, Suma de Letras, Objecive, Altea and Fontanar publishing labels. Left apart from the deal will be the activities of Alfaguara Infantil y Juvenil, the firm’s children’s division, which will remain with Santillana. Penguin Random House is already present in 22 countries, including Argentina, Spain, US, Mexico, Nicaragua, Panama, Paraguay, Peru, Portugal, Uruguay and Venezuela.
The union of Santillana with PRH will bring together an impressive array of authors. Among those names are Nobel prizewinners such as Alice Munro, Mario Vargas Llosa, Gabriel García Márquez, José Saramago, J.M. Coetzee, Orhan Pamuk, Doris Lessing, V.S. Naipaul and Günter Grass; as well as Cervantes Award winners Juan Marsé, Jorge Edwards, Guillermo Cabrera Infante and Sergio Pitol.
The announcement of the sale was made by Santillana CEO Miguel Angel Cayuela and PRH chief Markus Dohle. He said the acquisition would “strengthen our long-term commitment to Spanish-language book publishing” which he said was “one of the world’s most vital language markets”.
“When we officially became Penguin Random House, I proudly announced that this new company of ours was the first truly global trade book publisher,” Dohle said.
The deal also increases the company’s presence in Brazil, he said. “With our combined company, we will be in an even stronger position to provide authors and booksellers with a tremendous variety of publishing opportunities, and readers with an incomparable range of reading choices,” he added.
“This was not an easy decision to make,” Santillana’s Cayuela said. “However, these are times that require us to devote all our efforts to the very operations that defined us from the very beginning of our company, and our core business, which is education.”
The deal will allow Santillana to focus on the more lucrative education market. Educational books provided 87 percent of the publishing house’s revenue last year and typically have bigger and more stable margins than other publications, particularly fiction. The combined business expects to publish 1,500 titles a year, the companies said. Nuria Cabutí Brull, CEO of Penguin Random House Grupo Editorial (formerly known as Random House Mondadori) said the identity and independence of the publishing labels will be maintained. “Our authors will still be out number one priority. We will continue to strive to offer high quality publishing, business and distribution support to their books. This is a landmark moment which will allow us to offer our readers an unprecedented range of titles,” Cabutí Brull, who has been CEO since 2010, added.
Herald with online media