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."
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."