It is the end of an era for one of the most famous names in book publishing.
Penguin is being sold by Pearson, its owner for the last half-century, as the company focuses its activities exclusively on education.
Pearson today announced that it was selling its remaining stake in Penguin Random House, the book publishing joint venture it formed six years ago with Bertelsmann, the German media group.
The company originally owned 47% of Penguin Random House when the joint venture was set up in 2013.
It sold a 22% stake in the business to Bertelsmann, its joint venture partner, for $1bn in July 2017.
Today it sold its remaining 25% stake in the publisher, again to Bertelsmann, for £530m.
The sale means that none of the so-called ‘Big Five’ of English-language book publishing remain in British ownership.
Macmillian, like Penguin Random House, has had a German owner, Holtzbrinck, for the last 20 years.
John Murray, the original publisher of novelists such as Jane Austen and Sir Arthur Conan Doyle, was bought by Hachette, the French company which also owns Hodder Headline, in 2002.
HarperCollins, the original publisher of authors including the Bronte sisters and HG Wells, has been part of US-listed News Corporation – owner of The Sun, The Times and The Wall Street Journal – for the last 30 years.
And Simon & Schuster, founded in New York 95 years ago and once also owned by Pearson, is part of the US media conglomerate ViacomCBS.
Penguin is steeped in British book publishing tradition.
It was founded in July 1935 by Sir Allen Lane and his two brothers Dick and John.
The brothers had publishing in their blood: their uncle was John Lane, founder of the publisher Bodley Head which, ironically, has been owned by Random House for the last 32 years.
Book publishing legend has it that Bristol-born Sir Allen, a young director at Bodley Head, came up with the idea of Penguin after spending a weekend at Agatha Christie’s country home in South Devon.
Waiting on a platform at Exeter St David’s stationfor his train back to London, he browsed stalls at the station for something to read but despaired of the dismal selection of magazines and reprints of Victorian novels that were on offer.
He decided that there was a gap in the market for quality works of fiction that could be sold in cheap paperback format, not only at bookshops, but also at tobacconists and railway stations.
He declared later: “I wanted [the books to sell at] the same price as a packet of 10 cigarettes so that no-one could possibly say they couldn’t afford them.”
His fellow directors at Bodley Head dismissed the idea as wildly impractical although they at least agreed to distribute his books.
In those days, a hardback book typically cost eight shillings (about £27.89 in today’s money) and required sales of around 2,000 copies to break even.
They calculated that, in order to break even at Sir Allen’s proposed lower price of sixpence (£1.74 in today’s money), the paperbacks would need to sell around 17,000 copies each.
Undeterred, Sir Allen reasoned that, at such a low price, people who regularly borrowed books from public libraries might be persuaded to shell out for their own personal copy of a book.
He set about asking other publishers for the right to publish some of their titles.
They were initially sceptical, as were their authors, with George Orwell publicly urging publishers to have nothing to do with Penguin.
He wrote: “The cheaper books become, the less money is spent on books.”
Eventually, though, the publishers relented.
The first, Jonathan Cape, agreed to make available 10 titles at £40 each in the belief that there was little risk involved.
He later told Sir Allen: “I thought you were bound to go bust and I thought I’d take 400 quid off you before you did.”
The name Penguin came from Sir Allen’s wish for a name for the series that was “dignified but flippant”.
His secretary came up with the name Penguin and a colleague promptly designed the famous logo after making some sketches at London Zoo.
The books were also given a distinctive orange design that, in the 1930s, looked very modern.
The first 10 Penguin paperbacks included Ernest Hemingway’s A Farewell to Arms and Agatha Christie’s The Mysterious Affair at Styles.
Sir Allen sold three million books during his first year in business.
He went on in 1937 to launch a non-fiction arm of the business, Pelican, which was followed in 1940 by Puffin, a children’s books division, whose first title was Worzel Gummidge by Barbara Euphan Todd.
Sir Allen floated the company on the London Stock Exchange in 1961 and, remarkably, the issue was 150 times over-subscribed – a record for the exchange.
The demand for shares may well have been driven by the fact that, the previous year, Penguin had been acquitted of breaking the Obscene Publications Act 1959 – a law Sir Allen decided to test in court by publishing DH Lawrence’s banned title from 1928, Lady Chatterley’s Lover, in unexpurgated form.
He sold two million copies of the book in just six weeks.
Sir Allen, whose eldest daughter Clare is married to the popular author Michael Morpurgo, died in July 1970 at the age of 67.
By then, Penguin was in trouble, having been hurt by union disputes, cheap competition from rivals and, latterly, rows in the boardroom.
Within weeks of his death, the company was taken over by Pearson, which gradually restored its fortunes.
The sale of Penguin also marks the last landmark in the reshaping of Pearson – a company that began life as the construction contractor which built London’s Blackwall Tunnel and evolved into a conglomerate that, as recently as 30 years ago, owned a diverse set of assets including Chessington Zoo, Madame Tussuads, Royal Doulton china, the Financial Times and stakes in the merchant bank Lazard Brothers, Thames Television and the Chateau Latour vineyard.
These assets were gradually sold off by three chief executives: firstly Sir Frank Barlow, who died last month; Dame Marjorie Scardino and latterly by John Fallon, who succeeded her at the beginning of 2013.
The Financial Times and Pearson’s 50% stake in The Economist were among the last significant disposals and the sale of the remaining stake in Penguin Random House completes the process.
Pearson remains a business under pressure.
Educational publishing, while a sector with huge growth potential, is being disrupted by the transition to digital.
Mr Fallon has faced plenty of criticism down the years from investors frustrated at the pace of change.
The company announced today he would be stepping down next year and praised him for “working tirelessly…through a period of significant change”.
It will fall to his successor to continue that process and, in particular, to reduce further the company’s dependence on selling hard-copy school and college textbooks in the United States.
Get that right and that person will be garlanded by the City – if not achieving the status, enjoyed by Sir Allen, of having an orange plaque in his honour at Exeter St David’s station.