Penguin Random House and Simon & Schuster merger deal dropped

Simon & Schuster headquarters in Manhattan.
(Image credit: Robert Alexander/Getty Images)

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, The Week US

Catherine Garcia is night editor for TheWeek.com. Her writing and reporting has appeared in Entertainment Weekly and EW.com, The New York Times, The Book of Jezebel, and other publications. A Southern California native, Catherine is a graduate of the University of Redlands and the Columbia University Graduate School of Journalism.