The merger has been halted by the publishers’ parent companies.
In recent months, two of the largest publishers of print books in the entire world, Penguin Random House and Simon & Schuster had been developing a merger deal. Specifically, Simon & Schuster’s parent company, Paramount, would sell the company to the owners of Penguin, German media group Bertelsmann, for a $2.2 billion price tag. This gigantic deal drew intense scrutiny from the United States Department of Justice, who sought to block the deal on antitrust concerns.
At the end of October, Judge Florence Pan of the US district court for the District of Columbia ruled that the deal must be scrapped, as a merger of that size would have negative effects on the publishing business as a whole. Bertelsmann said that they planned to appeal this ruling afterward, but this week, have officially changed their minds and backed down from the plan.
Bertelsmann announced on Monday that they “will advance the growth of its global book publishing business without the previously planned merger of Penguin Random House and Simon & Schuster.”
Paramount added that Simon & Schuster is a “non-core asset” to them, and that “It is not video-based and therefore does not fit strategically within Paramount’s broader portfolio.”
One of the Justice Department’s major concerns of the merger was that it would adversely impact the wages and profitability of book authors. In August, hearings were held, were multiple authors testified with similar concerns.
The Penguin Random House deal to buy Simon & Schuster is officially dead. For its trouble, Penguin Random House now owes Paramount (the S&S parent company) a termination fee… of $200 million. w/ @xanalter @BenMullin https://t.co/Kz9FlPA6pw
— Elizabeth A. Harris (@Liz_A_Harris) November 21, 2022
“You might as well say you’re going to have a husband and wife bidding against each other for the same house. It’s kind of ridiculous,” bestselling author Stephen King testified at the time. “Consolidation is bad for competition.”