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German media giant increases stake in Penguin Random House

Associated Press logo Associated Press 7/11/2017

LONDON (AP) — British publishing company Pearson says it will sell a 22 percent stake in New York-based Penguin Random House to its German co-owner.

The sale will raise media company Bertelsmann's stake in Penguin Random House to 75 percent, leaving Pearson with 25 percent control.

The sale values Penguin Random House at $3.55 billion and will close in September. The company, which publishes classics like Jane Austen and blockbusters like James Patterson, will also undergo a recapitalization.

Pearson said it will make about $1 billion from the deal in the next year, with 300 million pounds ($390 million) going to shareholders.

Thomas Rabe, chairman and CEO of Bertelsmann, said his shareholders' earnings will increase by more than 60 million euros ($68 million) as a result of the deal.

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