Pearson - the publisher behind Penguin, Dorling Kindersley and the Financial Times - has agreed a deal with Bertelsman to combine two of the UK's best known book publishers.
Under the £2.4 billion deal will see Pearson control 47%, with German publisher Bertelsmann taking hold of the remaining 53%.
The merger will see the publishing Big Six become a Big Five; the other publishers being Hachette, Simon & Schuster and Macmillan.
Random House is currently the leading English language publisher in the US and the UK, while Penguin is the world's most famous publishing brand, known for its classic literature and educational material, and has a strong presence in fast-growing developing markets.
The news, which was announced on 29 October, puts an end to speculation in the weekend press that News Corporation's Harper Collins had planned to upset the merger with a rumoured £1bn bid for Penguin.
Pearson chief executive Marjorie Scardino, who is leaving the firm at the end of the year, said: "Penguin is a successful, highly-respected and much-loved part of Pearson. This combination with Random House... will greatly enhance its fortunes and its opportunities.
"Together, the two publishers will be able to share a large part of their costs, to invest more for their author and reader constituencies and to be more adventurous in trying new models in this exciting, fast-moving world of digital books and digital readers."
The combined company would be home to writers as diverse as Random House's Jack Reacher creator Lee Child and Fifty Shades of Grey's EL James and Penguin's long list of classical authors such as Charles Dickens and Jane Austen.
London-based Penguin employs 5,500 people worldwide, with around 950 in the UK. Random House has 5,300 staff globally and last year its sales accounted for just under 15% of the UK market, compared with Penguin's 11%.
The joint venture is subject to regulatory approval, but the two firms expect the deal to be completed in the second half of 2013.
The new company will be known as Penguin Random House - which led to a flurry of Random Penguin related tweets.
So, Penguin and Random House have officially merged. I do hope they call themselves Random Penguin.— Jen Campbell (@aeroplanegirl) October 29, 2012
Sad that the merged Penguin/Random House is to be called 'Penguin Random House'. I prefer 'House Penguin'. Who doesn't want a house penguin?— Tom Cox (@cox_tom) October 29, 2012
Dear Penguin Random House, it seems that the majority would have much preferred Random Penguin House. Please amend. Yours, Twitter.— Lesley Pinder (@Skipinder) October 29, 2012
To cheer up all of those who wanted the new publishing house to be named Random Penguin - Huffington Post UK hopes our gallery of random penguins can temporarily cheer you up.