Owner Gives Up on Publishing Merger Blocked by Court

Penguin Random House planned to buy Simon & Schuster for $2.2B
By Newser Editors and Wire Services
Posted Nov 1, 2022 12:02 AM CDT
Updated Nov 21, 2022 6:30 PM CST
Massive Publishing Merger Blocked
A book published by Simon & Schuster is displayed on Saturday, July 30, 2022, in Tigard, Ore. On Monday, Oct. 31, 2022, a federal judge blocked Penguin Random House's proposed purchase of Simon & Schuster.   (AP Photo/Jenny Kane, File)
UPDATE Nov 21, 2022 6:30 PM CST

Simon & Schuster's corporate parent announced Monday it has officially ended the agreement for Penguin Random House to purchase the publisher. The company had said it would appeal a court ruling last month blocking the deal. The parent, Paramount Global, still intends to sell Simon & Schuster, the AP reports. With this deal abandoned, Penguin Random House owes a $200 million termination fee to Paramount Global. "We have to accept Paramount's decision not to move forward," the publisher said in a statement.

Nov 1, 2022 12:02 AM CDT

A federal judge has blocked Penguin Random House's proposed $2.2 billion purchase of Simon & Schuster, agreeing with the Justice Department that the joining of two of the world’s biggest publishers could “lessen competition” for “top-selling books.” The ruling was a victory for the Biden administration's tougher approach to proposed mergers, a break from decades of precedent under Democratic and Republican leadership, the AP reports. US District Court Judge Florence Y. Pan announced the decision in a brief statement Monday, adding that much of her ruling remained under seal at the moment because of “confidential information” and “highly confidential information.” She asked the two sides to meet with her Friday and suggest redactions.

Penguin Random House quickly condemned the ruling, which it called “an unfortunate setback for readers and authors." In its statement Monday, the publisher said it would seek an expedited appeal. Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division praised the decision, saying in a statement that the decision “protects vital competition for books and is a victory for authors, readers, and the free exchange of ideas.” He added: “The proposed merger would have reduced competition, decreased author compensation, diminished the breadth, depth, and diversity of our stories and ideas, and ultimately impoverished our democracy."

Pan’s finding was a dramatic departure from recent history in the book world and beyond. The publishing industry has been consolidating for years with little interference from the government, even when Random House and Penguin merged in 2013 and formed what was then the biggest publishing house in memory. The joining of Penguin Random House and Simon & Schuster would have created a company far exceeding any rival and those opposing the merger included one of Simon & Schuster's signature writers, Stephen King, who testified last summer on behalf of the government. (More here.)

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