Pearson PLC said Wednesday that Chief Executive John Fallon plans to retire next year, and that it has agreed to sell its remaining 25% stake in Penguin Random House to Bertelsmann SE & Co. KGaA for $675 million.

The London-based education publisher PSON, +2.90% said Fallon will retire in 2020 once a successor has been appointed. The company will consider both external and internal candidates as part of a succession process, it said.