Penguin Random House wanted to buy another large publishing company, Simon and Schuster. They pitched $2.2 billion dollars, however the USA Justice Department put the kibosh on it. Penguin Random House wanted to appeal the verdict, however German media group Bertelsmann, which owns Penguin, was unable to convince Paramount Global, Simon & Schuster’s current owner, to help launch an appeal and extend the deal contract before it expires on Monday. This opens up other potential suitors such as Harper Collins and Hachette.
The U.S. Justice Department had sued to stop the tie-up of the two publishers, which combined would have accounted for more than 25% of all print books sold in the United States this year. In its complaint, it argued the deal would lead to lower earnings for authors because of the reduced competition. Best-selling author Stephen King testified in favor of the government’s arguments during the trial.
In a statement to Good e-Reader, Penguin Random House Stated. “Penguin Random House remains convinced that it is the best home for Simon & Schuster’s employees and authors, and together with Bertelsmann, we did everything possible to complete the acquisition. We believe the judge’s ruling is wrong and planned to appeal the decision, confident we could make a compelling and persuasive argument to reverse the lower court ruling on appeal. However, we have to accept Paramount’s decision not to move forward. We want to thank our Penguin Random House employees and the teams at Simon & Schuster for their support. We wish them the very best in the future, and look forward to continuing to make a positive impact on society through the books we are honored to publish for readers everywhere.”
I think since this deal fell through, none of the other major publishers will make a bid close to multiple billions of dollars. There are a few factors at play, such as interest rates at an all-time high. The bookselling business is also in a state of decline.
Michael Kozlowski has written about audiobooks and e-readers for the past twelve years. Newspapers and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times have picked up his articles. He Lives in Vancouver, British Columbia, Canada.