Values

D
üsseldorf, February 11, 2003, 4:00 a.m.
The ink on the Ullstein Heyne List acquisition
contract between the Axel
Springer publishing group and Random
House is still drying. In 14 of the 15
white Vitra chairs surrounding the long
table of a Düsseldorf law fi rm sit utterly
exhausted men. They’ve got four long
days of hard work behind them.
The empty chair was occupied by
Joerg Pfuhl. The lead negotiator for
Random House left the room without
saying a word once the contract was
signed. While the tension of the last few
days slowly seeps out of the 14 others,
the man who paved the way for 400 authors
– including bestsellers like John
Grisham, Nicholas Sparks, Stephen
King, Mary Higgins-Clark, and Robert
Harris – to move under Random
House’s roof is at a snack bar, waiting
on 15 orders of the Westphalian-style
fries known as pommes schranke.
The staff at the law fi rm are used to
conclusions of this kind; that’s why a
fridge stocked with champagne features
prominently in the meeting
room. While Pfuhl surprises the group
with fast food, the lawyers start letting
the corks fl y. The fi rst chapter in the secret
negotiating marathon to buy
Heyne comes to a close with a feast of
bubbly, sausage, and fries.
After signing the contract in Düsseldorf,
Pfuhl fl ies to Munich where he
calls a staff meeting at 9:30 a.m. The
foyer is full. For many employees, it’s
the fi rst time they’ve seen their boss,
who took on the job only a few weeks
earlier. “Random House is taking over
Ullstein Heyne List, pending the approval
of the cartel offi ce,” Pfuhl announces.
There’s silence, astonishment.
And then a roar of applause.
At 10:30 a.m., Springer board member
Hubertus Meyer-Burckhardt explains
the sale to Random House in a
press release as follows: “Despite the reorganization
measures that have been
introduced, we don’t see suffi ciently attractive
prospects for fi nancial returns
in the group’s current structure.”
At this time, Germany’s bookselling
market is in crisis. The number of books
– 24 –
MERGER IN MIDST OF CRISIS
being sold by traditional booksellers
has decreased signifi cantly, and there’s
an atmosphere of uncertainty due to
electronic media and new consumer
reading habits. The German book market
registered sharp declines in revenues
from 9.41 billion euros in 2001 to
9.07 billion euros in 2003. Despite this,
Random House continues to believe in
the book as an important cultural asset
and investment opportunity.
But the takeover proves to be a diffi -
cult undertaking. Fearing a “position of
Betting
on the book
business
market dominance” on the paperback
market, the German cartel offi ce indicates
a ruling against the acquisition of
the entire group in May 2003. Yet the
authorities agree to a solution proposed
by Random House: the acquisition
will be limited to Heyne’s core
business with the imprints Südwest,
Ludwig, Ansata, and Integral. The other
publishing houses belonging to the
group – Econ, Ullstein, List, and
Claassen – are to be sold to the Swedish
publishing group Bonnier, together
with the paperback lines from Heyne
Esoterik and Heyne Fantasy.
On November 25, 2003, Pfuhl welcomes
all the new employees joining
the Random House Group, and promises
to provide a corporate culture of
stability. But skepticism still reigns.
And it is only over the course of the
months that follow that the mood
transforms into confi dence, not least
because the integration takes place
In the midst of the German
bookselling crisis, Bertelsmann
decided to go ahead with a large
publishing acquisition deal. After
marathon negotiations and months
of talks with competition authorities,
Random House Germany became
the owners of the Heyne publishing
group. The purchase of the
paperback pioneer was risky, but it
quickly became profitable.
quickly, and opens up many new opportunities.
Within a month, fi nancial
systems have been synchronized and
integrated. A month later, the new corporate
organization is in place, and
sales and marketing soon follow. Employees
are informed about the integration
team’s every major move via the
intranet “@random.”
In the Random House Group with
its 43 publishing companies, almost all