Penguin and Random House in Merger

News Corp had expressed an interest in making a bid for Penguin Books

(Reuters)—Britain's Pearson (PSON.L) has agreed to merge its Penguin book division with Bertelsmann's Random House to create the world's leading consumer publisher, in an apparent snub to Rupert Murdoch's News Corp (NWSA.O).

Confirmation comes a day after Murdoch's Sunday Times reported that News Corp (NWSA.O) could make a direct bid for Penguin Books, an option that analysts appeared to prefer.