US Judge Blocks Penguin Random House’s Planned Merger Of Simon & Schuster

A federal judge has blocked Publisher Penguin Random House’s $2.18 billion merger deal with peer Simon & Schuster citing competition concerns for author payouts, reports said.

The ruling comes in favor of the U.S. Justice Department’s antitrust challenge that the intended merger would unlawfully curtail competition.

In response, consumer-book publisher Penguin Random House, owned by German media company Bertelsmann SE, reportedly said it views the deal as pro-competitive, and will file for an immediate appeal.

Paramount Global, which owns Simon & Schuster, said it is reviewing the decision and discussing next steps with Bertelsmann and Penguin Random House.

It was in November 2020 that Penguin Random House agreed to the acquisition of Simon & Schuster.

Last year, the Justice Department filed a suit against the proposed merger, arguing that the deal would give Penguin too much leverage over author payouts if it was allowed to acquire another of the five largest book publishers in the U.S. Simon & Schuster is considered to be the fourth largest book publisher in the country.

In the trial, District Judge Florence Pan accepted the Justice Department’s arguments.

The judge wrote in the ruling, “The Court finds that the United States has shown that the effect of the proposed merger may be substantially to lessen competition in the market for the U.S. publishing rights to anticipated top-selling books.”

The judge will release the reasons for the decision later as it contained confidential business information.

As per the merger deal, Penguin Random House is required to pay a fee of $200 million to Paramount Global if the deal failed to go through, or if its termination date was reached.

Source: Read Full Article