Penguin Random House and Simon & Schuster merger deal dropped
The $2.2 billion deal to merge Penguin Random House and Simon & Schuster has collapsed, Penguin's owner Bertelsmann said on Monday.
The Justice Department filed a lawsuit in November 2021 trying to stop the deal, arguing it would lead to less competition for highly-anticipated books and lower advances for authors. In late October, a U.S. judge agreed and blocked the planned merger. Bertelsmann, a German media group, said it would appeal the decision, but on Monday released a statement stating it "will advance the growth of its global book publishing business without the previously planned merger of Penguin Random House and Simon & Schuster."
Penguin, the world's largest book publisher, will now have to pay Paramount Global, Simon & Schuster's owner, a $200 million termination fee, The Guardian reports. In its own statement on Monday, Paramount called Simon & Schuster "a non-core asset. It is not video-based and therefore does not fit strategically within Paramount's broader portfolio."
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Author Stephen King, whose publisher is Simon & Schuster, testified during a hearing in August against the deal. "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," King said. "Consolidation is bad for competition."
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Catherine Garcia has worked as a senior writer at The Week since 2014. Her writing and reporting have appeared in Entertainment Weekly, The New York Times, Wirecutter, NBC News and "The Book of Jezebel," among others. She's a graduate of the University of Redlands and the Columbia University Graduate School of Journalism.
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