Canada’s biggest multinational publishing house just got bigger. Random House of Canada has become the sole owner of McClelland & Stewart, one of Canada’s oldest publishing houses.

Random House has owned a share of M&S since 2000 when its sole owner and chairman Avie Bennett sold it 25% of the company and donated 75% to the University of Toronto with the intent that M&S would maintain its editorial independence. Random House had been providing services such as sales, production, human resources and accounting to M&S since that time. But according to the announcement from Random House today, M&S had “been experiencing financial challenges” attributed to the difficult economy and digital-driven transitions.

RHC president and CEO Brad Martin said, “We believe with McClelland & Stewart fully within the Random House of Canada family we will more effectively be able to meet these challenges to ensure the growth and long-term stability of this iconic Canadian publisher.” Established in 1906, M&S is home to many of Canada’s biggest literary names including Margaret Atwood, Michael Ondaatje, Alice Munro and Leonard Cohen.

Reacting to news of the sale, the Association of Canadian Publishers expressed dismay "that Canada’s most storied book publisher, McClelland & Stewart, will be downgraded to an imprint of a foreign-owned multinational corporation. Today’s announcement marks the end of a long and illustrious history of a Canadian cultural institution."

In its announcement, Random House said that was pleased to note that it had already obtained regulatory approval for the deal. The federal Department of Canadian Heritage has been reviewing its policy restricting foreign ownership in the Canadian book industry. "While we wait for a decision on ownership policy,” said ACP president Margie Wolfe, “it seems that the policy has become irrelevant in practice....All of us need to remember that the foreign ownership policy was initially introduced to both protect and encourage the development of an independent and diverse Canadian cultural sector. Today we have lost one of our greatest homes for Canadian stories. It’s a sad and scary day.”

According to the announcement, Random House has committed itself to “maintaining the publishing program, including the eponymous McClelland & Stewart imprint and the New Canadian Library, Emblem Editions, and Signal imprints. RHC will also continue to fund and support the M&S Poetry program, the publication of The Journey Prizestories, and ongoing support for the Writers Trust Journey Prize. Random House of Canada is also establishing The McClelland & Stewart Lecture, an annual event to be held at the University of Toronto that will be focused around the advancement of writers and their ideas, a mandate with which M&S has long been closely identified.”

Doug Pepper, president and publisher of McClelland & Stewart since 2004, will continue to run M&S, reporting to Martin. Ellen Seligman, executive vice-president of McClelland & Stewart who has been its highly regarded fiction publisher for 12 years, continues in her role.

As a part of the deal, RHC also acquires Tundra Books, M&S’s children’s publisher, which will become the Canadian children’s publishing program within Random House while Doubleday Canada will maintain its young adult program. Tundra will continue to be headed by managing director Alison Morgan and editorial director Tara Walker.

Former owner Avie Bennett said, “Random House of Canada has been a wonderful partner for McClelland & Stewart for the past eleven years. The commitments they have made to upholding the tradition of M&S and the ongoing focus on Canadian publishing assures me that M&S is in good hands.”

President of the University of Toronto David Naylor added, “We greatly respect the care and attention with which Random House of Canada has managed their 25% ownership over the past eleven years and are confident that Random House of Canada’s commitment to McClelland & Stewart will help it achieve even greater success in the future.”