Penguin-Simon & Schuster mega publisher merger blocked by US court
Court, Gavel (Representational Image)
A US federal judge on Monday (October 31) blocked a USD 2.2 billion acquisition of publishing giant Simon &Schuster by its competitor Penguin Random House. The court has sided with the US Justice Department which hadargued against the mega-merger.
The mega deal had been announced in November 2020. It would have brought two of America's five largest publishers together.
US District Court Judge Florence Pan, in her ruling, said the government had convincingly shown that the merger would substantially lessen competition "in the market for the US publishing rights to anticipated top-selling books."
The judge said that full reasoning for the decision would be issued under seal since it was based on confidential business information.
The Justice Department has welcomed the decision. It has come only a week before crucial midterm elections. US President Joe Biden has tried to project his Democratic Party as one defending consumer interests.
The Justice Department under Biden has been more aggressive than his predecessors in attempting to block mergers, with mixed success so far.
"Today's decision protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas," said Assistant Attorney General Jonathan Kanter in a statement.
Penguin Random House, a subsidiary of Germany's Bertelsmann Group, dominates the publishing industry in the United States. It has 10,000 employees worldwide and nearly 15,000 books published per year.
Simon & Schuster, owned by Paramount, is the fourth largest of America's "Big Five" publishing companies, which also include HarperCollins, Hachette Book Group USA and Macmillan Publishers.
Big-name writers on the roster at Simon & Schuster include Stephen King and Doris Kearns Goodwin, while Barack and Michelle Obama and John Grisham have books published by Penguin Random House.
Simon & Schuster is also preparing to release Prince Harry's memoir in 2023.
Penguin Random House expressed its strong displeasure on the ruling. It said that it will request an expedited appeal.
"We believe this merger will be pro-competitive, and we will continue to work closely with Paramount and Simon & Schuster on next steps," it said in a statement.
Paramount said it was disappointed by the ruling. "We are reviewing the decision and discussing next steps with Bertelsmann and Penguin Random House, including seeking an expedited appeal,” it said.
(With inputs from agencies)
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