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A federal judge on Monday denied the publishing behemoth’s request to merge with rival Simon & Schuster, siding with the US Justice Department’s opposition to the proposed mega-merger. The $2.2 billion deal, which was first announced in November 2020, would have combined two of the top five American publishers. The government had convincingly demonstrated, according to US District Court Judge Florence Pan’s decision, that the merger would significantly lessen competition “in the market for the US publishing rights to anticipated best-selling books.”
Pan stated that because the decision was based on sensitive business information, her full justification would be released under seal. Only one week before the pivotal midterm elections, where Democratic President Joe Biden has attempted to portray his party as protecting consumers’ interests, the Justice Department applauded the decision.
In an effort to stop mergers, the Justice Department under Biden has been more aggressive than his predecessors, with varying degrees of success so far.
The German Bertelsmann Group subsidiary Penguin Random House, which employs 10,000 people worldwide and publishes nearly 15,000 books annually, is the industry leader in the United States.
The fourth largest of America’s “Big Five” publishing houses, which also include HarperCollins, Hachette Book Group USA, and Macmillan Publishers, is Simon & Schuster, which is owned by Paramount.
Stephen King and Doris Kearns Goodwin are two well-known authors on the staff of Simon & Schuster, while Penguin Random House is the publisher of choice for John Grisham, Barack and Michelle Obama, and their respective spouses.
In early 2023, it plans to publish Prince Harry’s autobiography.
Penguin Random House declared that it vehemently disagreed with the judge’s decision and that it would like to expedite the appeal process.
The ruling, according to Paramount, has disappointed it. The statement read, “We are reviewing the decision and discussing next steps, including seeking an expedited appeal, with Bertelsmann and Penguin Random House.”
Due to the fact that both companies have British divisions, the UK’s competition authority had also closely examined the merger before the US took action against it. In May 2021, it published a good opinion.
