Judge blocks merger between Penguin Random House and Simon & Schuster

A U.S. court has blocked an impending $2.2 billion merger between Penguin Random House and rival Simon & Schuster. limiting competition, reducing payments to authors, reducing the breadth, depth, and variety of our stories and ideas, and ultimately undermining our democracy.” This is reported The New York Times.

Penguin Random House, owned by Bertelsmann, announced about the upcoming purchase of Simon & Schuster in November 2020. For the publisher, which is a division of Paramount Global, Penguin Random House was willing to pay $2.2 billion.

Penguin Random House publishes about 25% of all paper books sold in the US, and the publisher’s revenue in 2021 was $4 billion. Simon & Schuster’s share of the US paper book market exceeds 9%, the publisher’s revenue in 2021 is close to $1 billion.

According to the US Department of Justice, the combined publishing house, in particular, would control almost half of the US blockbuster publishing rights market.

Penguin Random House immediately condemned this decision, calling it unpleasant for readers and authors, and announced their intention to appeal. If the deal is terminated, Penguin Random House must pay a $200 million release clause. Simon & Schuster also expressed disappointment with the court’s decision and said they were “considering various options, including an appeal.” Experts say that the decision of the court does not affect the fate of Simon & Schuster. It was up for sale before the Penguin Random House deal was announced, and parent company Paramount Global said it didn’t see publishing as part of its future. One of the likely buyers of Simon & Schuster is now called News Corp Rupert Murdochwhich owns another major international publishing house – HarperCollins Publishers.

Alena Miklashevskaya